NORTEL PLANS TO CUT JOBS SIMI PLANT TO BE HIT HARD.

Byline: Jesse Hiestand Staff Writer

SIMI VALLEY - Telecommunications giant Nortel Networks Corp. plans to cut 200 jobs at its Simi Valley plant as part of a companywide shift from older technologies to more promising markets, company officials said Wednesday.

The cuts will be handled by layoffs, attrition and early retirement over the next six months, as is being done with 3,800 other jobs in other divisions of North America's second-largest network equipment maker.

``We're focusing our products and work force on our high-growth areas, which we consider to be the optical and wireless Internet,'' said Nortel spokeswoman Vicki Contravespi. ``At the same time we'll continue to recruit aggressively in the areas we want to get into.''

The cuts in Simi Valley represent about half the plant's work force and some of those affected will have a chance to fill other positions in the company, which plans to have about 94,000 employees, the current level, when the overhaul is complete.

Nortel said the employees are no longer needed to support two relatively established products - as the Canadian company based in Brampton, Ontario, shifts focus almost entirely to fiber optic based packet-switching systems, which enable information to be sent over Internet and wireless systems.

Simi Valley City Manager Mike Sedell said Nortel's decision puts an assistance package at risk.

To help induce Nortel to their town, Simi Valley city officials agreed to make off-site improvements valued at about $282,000 for the company's building - items like street lights or sidewalks that a company normally would have to pay for.

Sedell is now looking into whether the job cuts mean Nortel has to reimburse the city for some of that work.

``We're going to discuss that with them,'' Sedell said of possible modifications to the assistance plan.

Nortel makes broadband and wireless networks such as the fiber optic systems that form the ``backbone'' of the Internet. The company estimates that 75 percent of Internet traffic in North America goes over their systems.

Optical networks are in demand because they can simultaneously handle voice, video and data streams while switching and transmitting the signals faster than traditional electrical//mechanical circuits, said Rhoit Shukla, president of LARTA, a Los Angeles-based technology think tank.

``Nortel is in no danger of losing its prime position among telecom companies - they just have to make some really key decisions,'' said Shukla.

Economist Jack Kyser of the Los Angeles County Economic Development Corp. said the jobs lost in Simi Valley do not signal trouble for the ``101 Corridor,'' those telecom and tech companies clustered along the Ventura Freeway from Sherman Oaks to Camarillo.

``Right now the window is open to make cuts and you don't stand out,'' Kyser said of a business climate where layoffs in the thousands are daily occurrences. ``Not only do the tech companies have to worry about what they are selling but also have to gallop to keep up with the changes in technology.''

Also Wednesday, Nortel announced a strategic alliance with AOL Time Warner Inc.

AOL will promote Nortel across online, television and print media, including its America Online Inc. service, Time Inc.'s Time and Fortune magazine and the CNN cable channel.

Nortel plans to work with business to voice-enable their Web sites using AOL Time Warner voice services platform.

``These innovative agreements will allow us to leverage each company's assets and core business to put Nortel Networks in front of a wide audience of potential new customers, while creating a relationship to spread the reach of new voice technology and related services,'' said Bob Pittman, co-chief operating officer of AOL Time Warner Inc.

Staff Writer Gregory J. Wilcox contributed to this report.