Nortel slashes another 7,000 jobs

Nortel Networks has announced further cost-cutting measures which will lead to the loss of 7,000 jobs.

Following limp sales, the Canadian networking giant has seen a further drop in its stock market price on both sides of the Atlantic.

The firm said that it expected revenues to fall by another 10 per cent to just £2.5bn.

Nortel, which has already axed tens of thousands of jobs, laid the blame on lower spending by US phone companies.

The news prompted debt-rating agency Moody's Investors Service to warn that it could cut the company's ratings for the second time this year.

Analysts have indicated that the bad news in the telecoms sector will continue for a good 18 months.

Kulbinder Garcha, an analyst at CSFB, told the Financial Times: "Nortel's pre-announcement suggests that there won't be a recovery in the telecoms equipment market until 2004.

"This can't be good news for any company in the fixed infrastructure business."

The company's shares fell 19 cents to $1.04 in New York last night. Rivals Lucent and Alcatel also saw their shares drop on the news.