Northern Telecom is to lay off around 3,500 staff around the world, but its Irish employees would not be affected, the company said yesterday. The Irish operation, which employs 900 people in Galway, is on "a separate track" to Nortel's other European businesses.

However, in a separate and entirely voluntary programme, the company will offer redundancy packages to Irish staff as it focuses on higher technology operations. The Canadian-based firm has just completed the formalities of its $7 billion (£4.73 billion) acquisition of Bay Networks and is now seeking to reduce its costs by cutting up to 5 per cent of its 85,000 global workforce. Nortel said the lay-offs would save the company around $300 million.

But none of the firm's Irish workers would be let go, the company said, because the Galway plant had been working on a separate plan to streamline its business. Under this programme, much of the low-tech, high-volume work carried out in Ireland would be moved to Cymcarn in Wales. "We have been in Galway 25 years and some of our staff have mentioned that they might be interested in a voluntary redundancy package," said Mr John Corcoran, the plant manager.

The company expected some 30 or 40 people, mainly those who had worked in the plant for a long time, to take up the offer, he said. The details are to be announced on Friday. "Our plan then is to hire in other resources, take some temporary people on to full-time, focused on higher technology," Mr Corcoran added.