Nortel axes 300 in new job cuts

Bert Hill
The Ottawa Citizen
26 January 2001

Job losses at Nortel Networks Corp. passed the 1,100 market yesterday when the company laid off 300 contract employees in manufacturing and other Ottawa operations.

The layoffs were on top of the dismissals of 830 permanent employees in the Ottawa region, primarily developing older technology or new products that fell short of expectations.

Those cuts were part of a plan to trim 4,000 jobs across the company and balance them with about 4,000 hirings in new growth areas.

The latest cuts surprised contract employees because many were making sophisticated parts for Nortel's high-speed Internet products, which are in high demand. They thought they had escaped the cuts because the pressure to meet production quotas had not let up.

Nortel spokeswoman Tina Warren said the job losses were not a response to the slower pace of business growth that is appearing across the telecommunications industry.

"It is never easy when people lose their jobs, but we made these changes because of process improvements. The increased efficiency allows our existing (permanent) employees to do the work."

At the start of the shift at Nortel's Corkstown Road plant and other locations yesterday, contract employees were called to a meeting. They say they were informed their services were terminated immediately but were not given a reason.

The 300 people were employed officially by Manpower, a contract employment service, which hires manufacturing staff. High-technology manufacturers use contract agencies to balance product demands and decide which people to hire permanently. As contractors, they receive no additional benefits beyond their pay and statutory holiday pay. They were not entitled to severance benefits, unlike the permanent Nortel employees recently laid off.

They had worked in Nortel operations for up to about 11 months. Most were paid about $11 per hour.