NEW YORK (CNN/Money) - Telecom equipment manufacturer Nortel Networks announced Thursday it would cut 3,500 jobs, or about 10 percent of its work force, as it struggles to rebound from financial reporting problems.
The company said the costs of the layoffs would be $300 million to $400 million, and it expects to have annualized cost savings of about $450 million to $500 million.
The company said it expects to be able to complete a restatement of 2003 results by the end of the third quarter.
The accounting problems disclosed earlier this year prompted it to announce Thursday that it had fired for cause seven additional executives with significant responsibilities for financial reporting at the line of business and regional levels.
Four of those individuals had been placed on paid leave as of April 28, when Nortel had fired for cause its president and chief executive officer, chief financial officer and controller.
The company also released what it said were preliminary and unaudited results for the first two quarters of this year. It said it now expects between break-even and penny-a-share earnings in both periods. The second-quarter results include a benefit of approximately 2 cents a share related to a customer contract settlement in South America.
It said its revenue was $2.5 billion in the first quarter and $2.6 billion in the second. That is roughly in line with revenue forecasts of analysts surveyed by earnings tracker First Call. There are no earnings estimates for the company due to its reporting problems.
The company also said it expects the overall market for its products to post low- to mid-single-digit percentage growth in 2004 compared to last year, and that it expects its own growth to be faster than the overall market growth.