Nortel Networks took a $3.41 billion loss this third quarter, and it has announced it plans to let go 1,300 employees to cut losses caused by the economic slowdown.

Nortel, which is based in Toronto, will also introduce salary and hiring freezes, cuts and consolidations of executive and management positions, and suspensions of some preferred-share dividends.

Nortel’s losses total to $6.85 per share in the third quarter, and are most likely due to a $1.14 billion goodwill write-down and a $2.07 billion deferred tax adjustment. Third-quarter results also include special restructuring changes amounting to $50 million. The previous year’s income for the company totaled $27 million, that’s five cents a share.

Adjusting for inflation, the communications company lost approximately $150 million or 30 cents per share in the last quarter, as opposed to an adjusted profit of $46 million or 9 cents the year before. The mean estimate by Thomson First Call had the company at a 30 cents a share loss.

Revenue dropped this year to $2.32 billion, down from $2.71 billion the year before. This is consistent with the mean analyst estimate of $2.31 billion. According to Nortel, last quarter’s revenue drop was due to the challenging economic environment, competitive pressure, and less spending by some important carrier customers.

Nortel’s projection for the third-quarter revenue was of $2.3 billion and gross margins were at about 39%. Margins came in at 39.2% in 3Q. The company’s latest restructuring and cost-cutting measures are expected to reduce annual gross costs by some $400 million in 2009.

Nortel will also decentralize a number of corporate functions and will move to a vertically-aligned business model which will give greater operative and financial control to the units. In the wake of the reorganization which will start at the beginning of 2009, some of the company’s executives will be let go. They are as follows: Chief Marketing Officer Lauren Flaherty, Chief Technology Officer John Roese, Global Services President Dietmar Wendt and Executive Vice President Global Sales Bill Nelson.

Twenty-five percent of the 1,300 planned job cuts will take place this year, and the remainder in 2009. These come as an addition to the previously announced and executed 1,200 job cuts. Nortel is also planning to re-evaluate all of its real-estate holdings.

These measures are the result of what Nortel called in September a review of the future course of the company, when they cited “significant pressure” when customers cut back capital expenditures in excess of what the company expected.

After the September pre-announcement of the third quarter situation, the company’s shares plummeted by 50%, down to $2.68 and have not yet recovered. The company’s shares closed at $1.17 on Friday in New York, down 4.1%.