Nortel Networks said Wednesday it is cutting another 2,900 jobs around the world as part of its business transformation — news that sent its stock up almost 10 per cent.

Nortel also announced plans to shift another 1,000 positions to countries with lower labour costs.

Nortel said the changes are meant to help boost its competitiveness and its bottom line.  

Notable Nortel job cuts
Date announced	# of jobs cut
February 2001	10,000
March 2001	5,000
April 2001	5,000
June 2001	10,000
October 2001	19,500
April 2002	4,000
August 2002	7,000
September 2004	3,250
June 2006	1,100
February 2007	2,900

Investors welcomed the announcement, sending the telecom equipment maker's stock up $2.83 to $33.50. On a split-adjusted basis, that's its highest level in almost 10 months.

"These are tough but necessary measures, and we recognize the impact they will have on affected employees," Nortel CEO Mike Zafirovski said in a statement.

The company did not offer any immediate details on where the cuts will take place. The telecom equipment maker said about 70 per cent of the layoffs will happen this year.

Of the positions being transferred to lower-cost locations, Nortel said about 400 of those jobs will be moved this year. During a conference call with analysts, Nortel officials identified the lower-cost locations as China, Mexico and India.

Along with the job cuts, Nortel said it will cut its real estate holdings by more than 500,000 square feet of space this year.

Chief financial officer Peter Currie, who announced on Tuesday he would be leaving the company in April, said the company's real estate holdings have fallen from 31 million square feet in 2000 to 11 million square feet at the end of 2006. 

The company said the moves will save it about $400 million US annually, with approximately half of the savings expected to be realized this year.

Nortel said the cuts could cost it as much as $390 million US; about $300 million US of that relates to severance pay for the workforce reductions, and about $90 million US relates to the real estate actions.

Nortel had about 94,500 employees at the start of 2001. Since then, the company has gone through several rounds of major staff cuts while dealing with a severe downturn in business following the collapse of the internet bubble. It had about 34,000 employees worldwide at the end of 2006. About 7,700 of its workers are in Canada.

Nortel also told investors its fourth-quarter revenues are expected to come in around $3.26 billion US, up almost nine per cent from the $3 billion US reported a year earlier.

During the conference call, Zafirovski said this year might turn out to be the first year of positive operating cash flow for Nortel since 1998.