Nortel is slashing more than 10 percent of its work force, with 3,900 people to be laid off.

Of those positions, 1,000 are to be transferred to what Nortel described as “lower-cost locations.”

Nortel’s workforce stands at 34,000. Of those, some 2,200 are based in Research Triangle Park.

The layoffs are the latest in a series of cost-cutting moves made by Chief Executive Officer Mike Zafirovski since he took over the beleaguered company in November of 2005. Nortel (NYSE: NT) also will reduce real estate costs and some spending as part of the cutbacks, Zafirovski announced.

Nortel’s stock climbed $1.04, or more than 4 percent, on the news to $26.98 in midday trading. By the close of trading, shares soared 9 percent to close at $28.26.

Seventh percent of the job cuts and 40 percent of the job shifts will take place this year.

The cost cutting announcement came a day after Chief Financial Officer Peter Currie announced that he was leaving. Currie was one of the few remaining senior executives at Nortel not hired by Zafirovski.

"We are transforming Nortel, and are focused on building a highly competitive organization that drives innovation and profitable growth," Zafirovski said in a statement.

Nortel said research and development spending would be cut to 15 percent of total revenues. General and administrative cuts also will be made. The company described those reductions as “significant.”

"These are tough but necessary measures, and we recognize the impact they will have on affected employees," Zafirovski said. "However, as we roll-out the various initiatives over the next two years, every effort will be made to leverage normal attrition and re-deploy affected employees to other areas of the company. Our goal is nothing short of creating a high-performance, successful and profitable enterprise based on a highly motivated work environment powered by strong business results."

The cuts are expected to produce $400 million inn annual savings, Nortel said.

Nortel also reported that revenues in the fourth quarter increased to $3.26 billion, up 8.8 percent from the same quarter in 2005.

Since the collapse of the telecom and “dot com” markets in 2001-2, Nortel has cut more than 60,000 jobs.