Nortel Networks has revealed plans to reduce spending on materials and research and development, according to a published report.
CEO Mike Zafirovsky told the Wall Street Journal the company expects to save about $1.5 billion a year by 2008 with the measures, which will reduce research-and-development spending to around 15 per cent of revenue from approximate 18 per cent, and cut administrative costs in half.
Nortel forecast last week that it would post sales growth of at least seven per cent in 2007 and raise gross profit as a percentage of revenue to 43 per cent from 38 per cent in the long run.
Nortel's revenue has risen approximately 7.5 per cent to US$8.1 billion this year.