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The latest profit warning from Nortel Networks Corp. was just the most recent in a series of punches that have knocked the telecom giant down from its status as Canada's 800-pound market gorilla.

Before Friday's opening bell, Nortel said it would fall far below analysts' second-quarter earnings expectations and cut another 10,000 jobs in an attempt to significantly reduce costs.

The layoff announcement brings Nortel's total workforce reduction to about one-third of the 94,500 employees it had before it started cutting last fall.

Nortel said it now expects to report revenues from continuing operations of about $4.5-billion (U.S.) in the second quarter - down 38 per cent from a year ago - and an operating loss of $1.5-billion or 48 cents a share. After charges, the company said it expects to report a net loss of $19.2-billion.

That multi-pronged announcement, in addition to a slew of negative analyst reports over the past couple of sessions, yanked its stock down 26 per cent this week alone.

Last Friday, Nortel's Toronto-listed shares traded at about $19 (Canadian). Now, they're in the $14 range.

At their July 2000 high-water mark of $124.50, Nortel made up more than 35 per cent of the weighting of the Toronto Stock Exchange 300-stock composite index - far surpassing fellow Canadian giants BCE Inc., Celestica Inc., Royal Bank of Canada and Alcan Inc.

Now, Nortel is worth about 7 per cent of the weighting on the TSE 300 as investors have peeled away more than 88 per cent of its market capitalization.

Royal Bank and BCE are worth about 4.5 per cent of the weighting while Toronto-Dominion Bank and Bombardier Inc. round out the top-five and make up about 3.5 per cent each.

Nortel's immense influence over the TSE was shown this past October when the TSE 300, which is weighted according to market capitalization, posted its biggest one-day plunge ever after Nortel's growth outlook failed to impress analysts.

The TSE 300 suffered a similar slides in February and March when it warned that the slowing economy was severely curbing telecom spending and as a result, its earnings would fall far short of forecasts.

At its peak, Nortel's market cap was as a high as $385-billion. It has since fallen to about $43-billion.

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