Nortel Makes Motley Fool’s Deathbed List

Cisco has hired a number of the Nortel Managers that ran Nortel into the ground....wonder how long it will be before Cisco suffers the same fate.

I used to work for Nortel. It is sad to see such a great company fail so miserably.

Looks like it´s not only Joannou´s and Behar´s old pals in sunny South Florida that need to be concerned about the "Politics" side to layoffs but also those of Pangia´s in Asia-Pacific. Have many of you noticed that Pangia is out and François Lançon is in?

http://www.nortel.com/corporate/exec/index.html

Pangia is now based in Atlanta heading a newly created position called Sr. VP. of Global Sales Operations and Strategy. This sounds like a hybrid position of what Riedel and Nelson currently do for Nortel.

Let's see: Pangia will "lead a global team to further drive customer focus across the company and develop new strategic approaches for profitable revenue generation."

And, Nelson will "focus on driving new growth for Nortel through revenue development capabilities, managing global customer relationships in a more integrated fashion and accelerating the Company's go-to-market strategies."

While Riedel will " be responsible for business development and mergers and acquisitions + focus on emerging technologies, market opportunities and strategic partnerships as well as driving all related key decision-making processes for Nortel."

Looks like two guys weren't enough to produce results like the MicroSoft and LG jv's and the chump change acquisitions of Tasman and Novera.

NW, Pangia's job is to be Bill Nelson's b3m boy, that is what "operations" means in Nortel nowadays - executive assistant. Pangia was a complete wipeout in Asia and I guess they feel they owe him something.

"Politics.
If your manager is in a different location than you or you are homebased, you can be damn sure he's not going to layoff one of his buddies in the same location that he's in."

Now that Dion Joannou and Martha Bejar are gone, I wonder who in sunny South Florida is no longer "protected?"

Hillbilly Nelson looks all busines but that Barrios kid looks soft.

This is counterpoint to my post on laid off employees protecting there own personal properties.

Nortel giving 60 days access to ex-employees being laid off? They're insane on PC.

My God. I worked at a 300 employee corporate where the layoff messages came a few days before the paper following. The CD drives where humming the whole time through. I won't get racist here, but, well, Weihua made out like crazy.

You fire someone. They come in. You ask them into your office, ask for their corporate property, keys, credit card, etc,, give them their box of personal belongings. And out they go. Escorted just for the punctuation. And they have absolutely no access ever again; physical, virtual, whatever.

I've seen plenty of people let go...but I've also seen a huge effort in my current organization (from director level) in helping people find other positions within the company. They "pre-notify" employees as soon as they have a confirmed number and then try to help those employees find other positions. Most of the employees affected actually have found other positions before the actual notification date.

Actually, Nortel layoff process went through many changes:

1. In the early days just after 2001, whole business groups would get whacked based on their business prospects (or lack). Examples: DSL access. Everyone would go at once in huge numbers.
2. After that, other groups were asked to slim down but keep the same output. Groups were asked to make lists of people to layoff, based on targets given by upper management. There was a process for keeping good people who were in the wrong place at wrong time, it was called "one for one". This meant you could bring in a qualified person from another group who was targeted for layoff as long as you added another person to your layoff list. This allowed Nortel to retain talented people.
3. After that, it was decided to make the process less rational and less business like. Layoffs would be randomly decided - sometimes take out a whole business, sometimes ask for same level of work with less people, sometimes just ask for 10% off the top. Management would draft up a list of people and HR would be the custodian of the dreaded list and would report regularly on who had submitted, whether targets were reached, were layoffs actually done, etc. Often, the list would comprise X people but 6 months later, only X-Y people were laid off, and no one could explain it. Usually, the targeted people were just in the wrong place at the wrong time - they would be given 30 days at Nortel doing nothing to look for a job - then 30 days at home working for Nortel doing nothing - then actually laid off. No worries about who is talented, just hit the numbers.

"... they would be given 30 days at Nortel doing nothing to look for a job - then 30 days at home working for Nortel doing nothing - then actually laid off."

Just a pointer for those newly whacked. Once you get your 60 days notice you'll see there is little point coming in even for the first 30, other than checking e-mail, say, or other sundry tasks. Note that it is _very_ important to take every single personal item home immediately. Everything. Once you've been absent for a couple of weeks or more some people get a little light fingered, and you come in one day and, "Hey! Where'd that book go?" It's sad but true. A prevailing culture that really shouldn't surprise by now, but it will for the naïve.

LEE is healthier than NT?? How ridiculous !!! LEE is in the publishing business and NT in the internet business. Man, this is the reason, never pay anyone on wallstreet to do "research" for you.

Interesting.
Thanks for the info.

Disgruntled,
the part about "they did everything they could for you" and the boss's boss was the one that made the decision not them, that was just scary!
thanks for the platoon like flashback, I could almost hear addagio for strings during the flashback.

Good post Disgruntled. Not sure I agreed with P for Pathetic. I see layoffs of people with young kids, illnesses, etc. Maybe another P for place, ie you are in the wrong place at the wrong time, like working on WIMAX.

Agreed. Having worked in Finance before, we all know how layoffs worked out from start to end. Upper Management set the target (i.e. how much they want to save in terms of salary and benefit by the layoffs), passed on to Finance along with a list of people in the BU. Finance sat there with a highlighter cross out peoples' names. Every now and then, Finance picked up the calculator to see if the target of saving has been met by adding all these highlighted peoples' remuneration package. Once this is down, Finance sat down with upper management and BU to gain their consents. All agreed, there goes the pink slip.

exnt,
Perhaps the manager put more weight in one or both of the other categories, or he/she sold their soul to get "made" into the nt management mafia, and tells him/herself that "these are the tough decisions that true leaders have to make everyday", who knows,.. my little rant was just a rough guide based on what I had witnessed over the last eight years.
I also wonder what Ken's opinion would be if it wasn't posted from an NT laptop, while connected behind the NT firewall.

In the end the real smarties with conclude that global warming was the cause for Nortel's ills/demise with the spoils of epic proportions going to the secret society within the US, which already has Obama in its crosshairs.

Trust them.

As a current employee I have to strongly disagree with Disgruntled. Most of the stuff he wrote I have never seen myself and I've known a lot of folks that have gotten laid off.

Everyone I've known that got laid off was done so because of their performance compared to others. I've had some disagreements with the choices made but obviously the manager is going to have a different perception of their people then I do. A manager is more likely to dump someone at a different site since they don't get to interact as much with the person and hence don't know their abilities as well. This is at an engineering level anyway; I don't know how its done for management layoffs.

Daniel,
the criteria for layoffs is nothing more than cronyism, pure and simple. If you are your managers "fair haired boy" than you should have nothing to worry about. Oh sure, they'll flap their lips, and spout sesquipedalian diatribes about evaluating performances, and forward looking ambitions, etc, etc, but in reality it boils down to who is beholden to you.
Now, if the whole dept or product is being cut or outsourced then everyone goes, so the previous doesn't apply.

(now for a little rant of my own)
The criteria for layoffs are weighted in this order.
Politics, Pathetic, and Performance.
Politics.
If your manager is in a different location than you or you are homebased, you can be damn sure he's not going to layoff one of his buddies in the same location that he's in. Its all about empire building! "I'm in Raleigh, all my staff is in Raleigh", this enables your manager, he or she, to fend off being replaced by a manager from a different location. Not in the same location, then you are at risk. In the same location but not on good terms? e.g. you openly or publicly disagreed with some of his/her policies or decisions, guess what? they take that as an affront to their managerial brio, so now that they can cut heads, old scores can now be settled! Remember, they'll say its due business downturns but its really about settling old scores or protecting ones empire.

Pathetic.
If there were no candidates based on the previous criteria, then they switch to the second criteria. Who has the least pathetic life story! This by itself sounds absurd, but think about it, at the end of the day, the manager has to show his face around the office after the layoffs are over and done with(well this round at least), (all examples are fictitious) suppose the selection is down to 2 candidates, Smith who recently inherited a small fortune from a distant relative, or Johnson, whose wife also worked for Nortel and was recently let go, and their child has some serious and costly illness, and if he is let go, they wont be able to get another job because of the healh care issue,...
hmm,..kind of a no brainer dont you think? Managers don't like being asked "how could you?" as a reminder of the cruelty of the layoffs, when the same people asking would shut right up if the boss's response was "are you willing to take his or her place?"

So, if they were unable to make a decision based on the previous two criteria, then they go to the third criteria.
Performance.
this is a combination of who has the most valuable skills, and who can be literally worked to death, more than anyone else.

And for those who do get let go,..this is how it will play out.
Your manager will inform you and tell you the decision was based on <some criteria="" implausible="">, e.g. your performance metrics were down based on the previous year or quarter("What?!?! but I was on sick leave during that time?!?!?") or you had too many absences, the product you work on is no longer viable,..etc, etc,..
we all know this isn't the real reason, its just some BS in order to placate any argument you may have, the real litmus test is how does this criteria stack up against the other people being let go?
Then you manager will stress that the decision wasn't up to him or her, "they did everything they could for you", "but based on the <bs here="" reason="">, <name boss="" boss's="" boss,="" managers="" of="" or="" your=""> made the decision, and refused to take any input from us!" (sound familiar?)
Then the following day you'll meet with an overly cheerful and compassionate lady from H.R., who'll pretend to listen to all your gripes but in reality her job is just to get you to sign the papers and get out the door without any workplace violence.

Thanks for all your years of dedicated service, this is how it will end.
</name></bs></some>

I forgot to mention the part where after you get let go, when you inform the coworkers, that you thought you were close to, they will feign surprise and outrage at the same time, and "this is the reason that Nortel is going downhill", but in reality they were told about it by the manager a couple of weeks earlier and were sworn to secrecy, and they kept that bond, knowing full well that if they didn't their name would be on the top of the list for the next round. After seven years of surviving layoffs, each round my manager would give me a call, or have a brief face to face to say that I had nothing to worry about, up until the last one, where I didn't get the heads up that I would be ok. (get the picture!)

Disgruntled,

You couldn't have explained the process more clearly, my being twice around the block there. It's no different anywhere else, of course, but for the younger ones, where Nortel was their first corporate experience, it can be very painful

Daniel is a SB.

Anybody who thinks Nortel is going to go Bankrupt has been into the lepages too much. Nortel has been in a crisis for 8 years, and they are still kicking. Only Bashers continually write them off. I remember people saying they were going to go bankrupt
in 2005, when they were in much worse shape than they are now.
Again bashing is weak.
"Rumour has it" and "heard it through the grapevine of upper management" is old, old, old and boring.
Now back to my question about layoffs.
What are the main criterium for making that decision?

By the way, I don't use the term "crisis" lightly. There are quotes containing that word that are circulating thru upper management.

Nortel's leadership is a cancer on the company, but it's a slow moving variety. I hope the board wakes up and gets the patient into treatment asap, before too many more body parts need to be removed.

Nortel is already at the point of body parts needing to be removed. What treatment do you propose ? I maintain that no management could get Nortel out of this crisis because there is no bridge to future revenue to replace the current revenue that is falling off a cliff. Only a government backstop can save Nortel now.

The cash is in the same ballpark as the debt, and income is in the same ballpark as expense. Nortel could run for another 100 years like that ...except for the fact that the income sources are beginning to erode and the replacement sources are iffy, at least iffy for Nortel.

What numbers and trends are you looking at ? The trend of Carrier revenue falling off a cliff cannot go on for more than 2-3 quarters before Nortel files for bankruptcy protection. After the most recent quarter's results it would seem to be a matter of when not if this happens. Nortel is in a crisis again and we are now in the worst possible credit crisis since the great depression. Its a race for cash and meeting reserve requirements in the banking industry. Don't be surprised if Citigroup or other investment banks call in their loans to save their own hides. That would leave the likes of Nortel with nothing. This is nothing less than a full blown crisis of survival.

Nortel is a long way from bankruptcy. The cash is in the same ballpark as the debt, and income is in the same ballpark as expense. Nortel could run for another 100 years like that ...except for the fact that the income sources are beginning to erode and the replacement sources are iffy, at least iffy for Nortel. Nevertheless, bankruptcy is a long way off because as quarterly income declines, more of those remaining jobs can be cut to maintain the perception of balance.

Nortel's leadership is a cancer on the company, but it's a slow moving variety. I hope the board wakes up and gets the patient into treatment asap, before too many more body parts need to be removed.

Additionally, as someone previously pointed out (here I think), Nortel is the golden child of Canada. The question is not "will Nortel fall on hard times?" but "will Canada let one of it's largest and most notable companies go bankrupt without offering it some kind of stimulus package?"

So here we go with the bankrupt scenario again.
This compnay has almost 4 billiion in cash even though their debt is slightly
above 4 billion.
But don't you see..that doesn't matter.
Try thinking in the terms of a mortgage.
Nortel has a 4 billion dollar home, but they owe more than 4 billion on it.
The way you carry on...credit and loans.
Nortel will always get credit and loans whether it be from the government or banks even if they owed 8 billion.
They still sell hardware, software and services and that will ensure they don't go bankrupt.
The bankrupt thing is so passe.
Please be more original and realistic.
Now back to my question about layoffs.
What is the most influential decision(s) when the layoff list is made?

Granted, Nortel has been a real disappointment in many ways for years, and I'm concerned about its future as a company. It seems the company can't get a break. But, Motley Fool is always bearish on Nortel, and seems to have made it part of its mission to use Nortel as a punching bag. I always take anything Motley Fool says about Nortel with several extra grains of salt.