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Nortel cuts 3,200 jobs
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Nortel Networks will cut 3,200 jobs as it continues to reorganize under bankruptcy protection, the latest in a series of signs that the telecommunications equipment vendor is struggling to regain its footing as it restructures.
The Canadian company said that the cuts would happen over the next several months. Nortel said its board has approved a plan to not pay any bonuses for 2008, and that it was seeking Canadian court approval to end its equity based compensation plans, including stock options, restricted stock units and performance stock units. Nortel also said it was continuing its Annual Incentive Plan for 2009, but would make changes to permit quarterly payouts instead of annual payouts.
"There is nothing more difficult than notifying employees, and Nortel is extremely conscious of the personal financial burden this will cause affected employees and their families," Nortel CEO Mike Zafirovski said in a statement.
Nortel, which was once one of the strongest telecom companies in North America, filed for bankruptcy in mid-January. The company has until May 1 to finish restructuring and reorganizing its debt. Since declaring Chapter 11 bankruptcy, the company has exited the mobile WiMAX business, which significantly impacted the business of its partner Alvarion. Nortel also has decided to postpone the sale of its Metro Ethernet Networks business and pledged to cut more jobs and reduce costs.
For more:
- see this release
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Comments
Posted by 3GPP Chairman | February 25, 2009 - 8:13pm
Shouldn't Mike Zafirovski be the first to go? Why is the BoD keeping him?
Posted by Anonymous | February 26, 2009 - 8:49am
The ex GE guys who become CEOs are trained to work the books and grab as much dough as possible, before exiting after profits and stocks have crumbled. Take a look at Home Depot, Fannie Mae, Chrysler, etc. And now Nortel. Then they ask for your tax money to bail out their mess, and they wear clover leafs while doing it.
Posted by Downs | February 27, 2009 - 12:17pm
This MZ fellow is completely the worst nightmare to Nortel. 11M was paid for his problem with Motorol even before he was in office. With his healthy CEO pay and package, he made average around 200 trips between Toronto and his home in Illinois annually, around $5000 for each trip, paid by Nortel. What has been in his "restructuring plan" ? Nothing else but selling R&D facilities and laying off the employees.
Nortel wouldn't have ended up with today's misery If the BoD didn't pick him up in the first place.
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