Canadian telecom equipment maker Nortel Networks said today it plans to cut 2,900 jobs over the next two years in an effort to cut costs.
The company employs almost 1,000 people at sites in Dublin, Galway and Belfast.
Dave Silke, head of European Corporate Marketing told ireland.com the majority of the job losses were expected to come from North America.
"While I can't rule out that there will be an impact on our functions in Ireland, in Galway our multimedia R&D is very significant for Nortel. It is the same with our supply chain office outside Belfast."
More than 300 people are employed at Nortel in Galway, around 650 in Belfast and a further 25 are involved in sales in the Dublin office. Mr Silke said there was "no doubt as to the importantance of the role played by the Irish operations."
The job cuts, 70 per cent 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 per cent 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 per cent 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.
Nortel Networks US shares rose $1.17, or 4.5 per cent, to $27 in pre-market trading.