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Nortel shuts Indian research lab

Canadian telecommunications equipment maker Nortel Networks said on Wednesday it had closed its research and development lab in India, which employed 43, to focus on higher growth areas.

Last month Nortel shocked global financial markets by announcing plans to slash 10,000 jobs and predicting a $19.2-billion second-quarter loss. This came on top of a 20,000 job cuts in April.

"The service of Nortel Networks India Technology Pvt Ltd in Delhi, which has focused on development of low-growth legacy products, is no longer necessary," Nortel Networks (India) Pvt Ltd said in a statement.

"Forty-three positions were made redundant...This is our regrettable but necessary business decision...The affected employees have been notified and are being compensated accordingly," it said.

Last October the world's largest supplier of telecom equipment had unveiled ambitious plans for India, saying it expected to spend up to $350 million over three years on Internet-related projects.

But in recent months Nortel said a worsening US economy had prompted it to postpone further investment in India.

The telecom giant is shutting its Indian research outfit at a time when global database giant Oracle Corp plans to expand its Indian R&D lab and leading computer maker Hewlett Packard plans to set up research facilities in the country.

Those two US firms are among many global giants actually increasing hiring in India to take advantage of its cost-effective software workforce, as a sluggish home economy increasingly pushes firms to cut costs.

Top Indian software firms have said they expect a significant drop in revenues from troubled telecom giants.

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