The troubled North American communications industry cast its shadow on Galway yesterday with confirmation that Nortel Networks plans to shed 40 jobs there as part of its decision to cut 10,000 staff worldwide.

Staff working on systems integration in the Canadian fibre optics company's Galway base were informed of the news on Wednesday. The company said yesterday that there would be "approximately" 40 redundancies in the operations area of the business. This was in line with the announcement made on February 15th in relation to job cuts globally, the spokesman said.

"While these decisions are always difficult to make, we will provide those employees with a consultation process through their appointed representatives," the spokesman said. This consultation had already begun, he said, and no additional redundancies were planned. SIPTU, which represents the majority of those affected, said that it was a "very bitter pill" for workers who had "offered extreme levels of flexibility" to management. The union hoped there would not be a domino effect on technology-based industries in Galway.

Shares in the Canadian worldleader in fibre optics plunged in early trading in both the US and Canada last Friday after the company issued a profits warning and said it would cut 10,000 jobs - more than double the number predicted in a recent announcement. This was attributed by its president, Mr John Roth, to a more rapid and dramatic economic downturn in the US, and a drop in consumer spending on new equipment.

The company employs 94,000 people worldwide and has a major presence in Ireland, with 2,400 staff in Belfast, 730 in Galway, 50 in Dublin and 45 in Shannon.

Mr Colm Keaveney of SIPTU in Galway said the union was in negotiation with the company yesterday to try and save as many jobs as possible and to pin down the precise figure. It was unfortunate that the news had come on the back of so many recent job loss announcements, he said.

The cold economic winds affecting the technology sector have also hit Dell Computers and Hewlett-Packard, although Dell has confirmed that its 5,700 Irish jobs are safe. Last week, Dell's vice-president, Mr Paul Bell, said that there was a lot of "uncertainty" ahead.