Shares in Nortel (NYSE: NT) plunged more than 15 percent Tuesday after the company disclosed that it would its targets for profit margins and cost-cutting.

Nortel shares shed 64 cents to close at $3.42.

The company recently announced plans to exit most manufacturing, and thus shedding another 2,500 jobs, in a deal with Flextronics. But in its regular update as required by the Canadian government following the financial scandal that rocked the firm over the past several months, Nortel said it has not yet succeeded in driving costs below 40 percent of revenue and gross margins are not in the 40-percent range.

Analysts said the company may have to cut further. Nortel has already reduced its employee count by more than 60 percent to some 35,000 and closed hundreds of facilities.