Nortel Networks CEO Mike Zafirovski will step down from the bankrupt vendor today, news that conincides with the release of the vendor's second quarter results.
In a statement regarding the future structure of Nortel's management, the company said it had reached a "natural transition point" to make significant changes. In addition to Zafirovski's resignation, Nortel will reduce the size of its board of directors from nine members to three. John MacNaughton, Jalynn Bennett and David Richardson will remain, with Richardson serving as the chairman. The company is in the process of selling off its major businesses, including its CDMA and LTE assets to Ericsson for $1.13 billion.
Zafirovski came to Nortel in 2005 in hopes of remaking the company. However, the economic downturn took its toll on the Canadian vendor, which filed for bankruptcy protection in January. Zafirovski received praise from Harry Pearce, the current chairman of Nortel's board, but Pearce noted that Nortel and its outgoing chief executive have reached a "logical departure point."
In the second quarter, Nortel reported a $274 million loss, wider than the $113 million loss it had in the second quarter of last year. The vendor recorded revenue of $1.97 billion, down 25 percent from the $2.62 billion it posted in the year-ago quarter but up 14 percent from its $1.73 billion first quarter revenue. The company said the revenue decline was primarily due to the continued economic downturn and uncertainty related to its bankruptcy proceedings.
Courts approve Ericsson-Nortel deal
Canadian government mulls Ericsson-Nortel intervention
Ericsson wins Nortel wireless assets for $1.1B
Nortel reports $507M loss, 37% drop in revenue