Canadian telecom equipment maker Nortel Networks Corp. said Wednesday it plans to cut 2,900 jobs over the next two years in an effort to cut costs.
The job cuts, 70 percent of which will occur this year, and other cost cutting measures are expected to save about $400 million a year, with about half the savings realized in 2007.
The company also plans to shift about 1,000 positions from higher-cost to lower-cost locations, with about 40 percent of this taking place this year.
Nortel said its new business model requires a "significant reduction" in administrative expenses, but added its research and development investments, while reduced, will be maintained at 15 percent of total sales.
The company added it is also cutting costs by reducing its global real-estate portfolio.
The cost of these actions could be as high as $390 million, the company said, with about $300 million related to the job cuts and the rest to real estate reductions.