Nortel Networks has become the latest tech company to cryfoul over the worsening economic climate, after revising its full-year outlookdownwards, and has admitted it is seeking to explore a divestiture of its metroEthernet network (MEN) unit.
According to CEO Mike Zafirovski, full-year revenues areexpected to slip between 2% and 4%, with Q3 revenues coming in at around$2.3bn.
Nortel complained that a decline in capital expenditureamong carrier customers had hit harder than expected, and added that deferredIT investments among enterprise and metro Ethernet customers were also startingto bite.
In a statement, Nortel said that since reporting its Q2numbers it had started to see further pressure on revenue due to foreignexchange impact and product delivery delays.
Zafirovski said: “It is clear that the environment in whichwe operate requires immediate and decisive actions. A comprehensive review ofour business is taking place and we are determined to reshape the company toestablish a clear path for renewed value.”
He added that the divestiture of the MEN unit would go someway to strengthening Nortel’s flagging balance sheet and funding theanticipated restructuring.