Nortel will lay off 3,500 people — or 10 percent of its workforce — as part of a strategic plan the company unveiled Thursday morning before markets opened.
Nortel also announced that seven additional executives had been fired as the company’s internal investigation of its finances continued. Nortel said it would seek to recover bonuses paid to the dismissed executives. It did not identify who was fired, but all were involved in corporate finance. Frank Dunn was fired as CEO earlier this year as Nortel began reviewing its finances dating back to 2001.
The reviews have triggered federal investigations in the United States and Canada as well as law suits.
In a statement that ran 11 pages, Nortel spelled out its intention to reduce costs by $450-550 million through job force reductions and other changes. It expects to take a charge of $300-400 million for the workforce reductions.
Earlier this year Nortel announced plans to dispense with virtually all its manufacturing operations in a deal with Flextronics.
Nortel also said it would streamline the corporate organization, name a new chief strategy officer, a chief marketing officer and “a renewed commitment to the best corporate practices and ethical conduct, including through the establishment of a chief ethics and compliance officer.”