Nortel could slash up to 5,000 workers; has the deathwatch begun?

Updated Nov. 7, 2008 at 8:01 a.m.

Nortel could slash up to 5,000 workers; has the deathwatch begun?

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"They're still way out in the wilderness. It's almost impossible to cut your way to growth." – Analyst Duncan Stewart

RESEARCH TRIANGLE PARK, N.C. — Has the deathwatch for Nortel begun?

Nortel Networks (NYSE: NT), a global powerhouse with 90,000 employees less than a decade ago and its stock now trading around a greenback, might announce a slashing of between 3,000 and 5,000 jobs when it reports quarterly earnings on Nov. 10, an analyst told Reuters this week.

He also warned that making job cuts would not ensure the struggling telecom gear’s future.

A lot of Nortel employees, let along stockholders and analysts, will be looking for the first hints of Nortel’s plans at around 6 a.m. Monday, when the company says it will issue a press release. A live conference call and webcast with Chief Executive Officer Mike Zafirovski and Chief Financial Officer Pavi Binning is set for 8:30 a.m. – well ahead of Wall Street’s opening bell.

Nortel warned in September that a slowdown in the telecom industry would likely lead to further restructuring. Nortel also is trying to sell its Metro Ethernet Networks business unit.

The company employs some 2,000 people in Research Triangle Park.

Nortel cut some 2,100 jobs earlier this year. It currently has around 32,000 employees, compared with some 90,000 in 2000.

Duncan Stewart at Duncan Stewart Asset Management in Toronto said he expected Nortel to cut between 10 and 15 percent of its remaining staff. Those cuts would not include personnel who would be part of the Metro Ethernet Network sale, he added.

The sale and layoffs may still not be enough to save the company, however.

"They're still way out in the wilderness," Stewart said. "It's almost impossible to cut your way to growth."

A recent story at The Deal, meanwhile, raised the question: Final Days for Nortel?

“The discussion these days around Nortel is increasingly taking a ‘final days’ tone,” The Deal said. “Some analysts say the company's planned sale of its Metro Ethernet Networks business, regarded by some as the company's crown jewel, will not be the last asset Nortel has to part with just to remain liquid.”