Canadian telecoms firm Nortel Networks, one of the biggest losers of the hi-tech slump, is to cut another 7,000 jobs.

Nortel has already reduced its staff dramatically, and now aims to have just 35,000 employees at the end of 2002 compared with 95,500 two years earlier.

The news of yet more job cuts came as the firm lowered its sales targets and announced a cost restructuring.

Nortel, which supplies telecoms and internet equipment, blamed a lack of spending by telecoms firms for its ongoing woes.

Investor agony

Many phone firms are themselves suffering crippling debt as a result of the hi-tech slump, and can no longer afford to invest in new networks.

Nortel now expects its revenues during the July-September quarter to be 10% lower than its previous forecast.

But it claims it can still return to profitability by the end of June 2003.

Nortel shares closed 4.7% lower at $1.23 on Tuesday, a fraction of the $85 price reached in July 2000.