Telecommunications gear maker is preparing for a possible bankruptcy filing in the event a recently launched restructuring plan does not work, the Wall Street Journal reported Wednesday.

A Nortel (NYSE: NT) spokesperson told the newspaper that “no bankruptcy filing is imminent.” The Journal said its report was based on unnamed sources.

Nortel, which is based in Canada, employs some 2,000 people in the Triangle region.

Fighting sluggish sales, Nortel recently announced plans for layoffs and other cost-cutting measures. Its shares traded at 52 cents Tuesday.

Nortel is working with advisers to consider strategy, Ronald Alepian told the paper.

"We remain focused on carrying out the restructuring we outlined on Nov. 10 to cut costs," he said.

Nortel also may seek assistance from the Canadian government, the Journal added.