Another 3,200 Employees Get the Axe

By Mark Evans | Published: February 25, 2009

With speculation rumbling over the last week or so, it should not come as a surprise that Nortel announced today it will slash its workforce by another 3,200 employees, or about 10% of its workforce, over the next few months.

“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,” CEO Mike Zafirovski, said in a statement. “Nortel is a company driven by people and innovation. But with the unprecedented economic environment and resultant impacts on revenues, significant changes are required to regain our financial footing. Tough decisions are being made to restructure the company and work towards a successful emergence from creditor protection.”

Mike Z. told Reuters that more staff reductions are possible.
Nortel also said its board of directors has approved a recommendation not to pay any 2008 bonuses under Nortel’s annual incentive plan. As well, Nortel is seeking Canadian court approval to kill its equity based compensation plans, including all outstanding equity under the plans (including stock options, restricted stock units and performance stock units), whether vested or unvested.

Still no word from Mike Z. on whether he’s willing to share the pain by taking a reduced salary. It’s also interesting that the board didn’t recommend there be no 2009 bonuses.

For more, check out MarketWatch

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  • 4merEmployee22
    Imagine 3,200 employees filing bankruptcy protection? All or any existing
    debts erased, wiped out, or forgiven?

    Soon, Canada will file a bankruptcy protection under the United Nations
    and ceased all immigrations to Canada because there is no more
    work in Canada!!!!
  • GrimReaper
    Just face the facts and accept your layoff notice with pride, Nortel desk jockeys. You all have sure earned it!
  • great_unwashed
    Mr Dunn, didn't you get enough of it out of your system when you pillaged the company during your time at the helm? I know it's a shame you squandered it all on Enzyte, trying to satisfy your spouse, but why take it out on those that are trying to keep this company solvent. Perhaps you should have gotten that last prescription for Prozac instead.
  • RealityStrikes
    Don't you have other employees, or young girls, that you need to angrily berate, Joel? Stop wasting your time here....
  • GrimReaper
    HAHA! Can't wait to see your sad pathetic faces on the news.....boohoo! why me? Why? Because you wont face the facts and get another job. But who would want someone from NT anyway? Better get a good broom you are going to need it, hahaha!
  • less
    Pinched faces of any pallor turn you on, eh, Hole.
  • winstonSmith
    10% reduction announced in Q1- this indicates that it really is "business as usual" at Nortel.
  • protosphere
    Interesting Mikey reiterated not wanting to talk about 2009 so many times before downplaying folding to fold, and then claim they didn't know they would earlier too. ( he reiterates a lot, like the term transparency in the past, or 3 to 5 years for that matter like we forget what he says easily)

    They still make no reference to 2009 because this is the year they and the Nortel brand will disappear I suspect.

    Also interesting is the added $100M in lawsuit insurance and premiums for legal fees when they announced trading their options bet after a losing hand with cash instead.

    They seem to still be plagued in this options to cash challenge as they wind down operations... staff... (and customers while defying the numbers) , etc...

    Next thing you know is Mikey will feel his lost speculation in a $20 buying opportunity was punitive enough. =)
  • less
    Another 10% reduction will pretty much shut down R&D in select NA locales
  • linho
    there is no R&D in Nortel. Now only "Sale and Sale Support" according to JH and MZ.
  • less
    Well, in the Advanced Z'ian Stratosphere the letters R&D = Relo & Demo
  • stillnosubstance
    Yet another vague anouncement of job cuts before any serious planning of where the jobs will go from has been made. What does this do for employee moral? The latest lucky people will find out over the next few months that they are affected, but it won't be the end of it for the poor sods left behind even then.
    Why on earth, given all the time management have had, could they not have had a business plan prepared when they filed in January. The writing had been on the wall for years! Still no plan, still no idea where we are heading and who is affected. Customers don't want our execs making reassuring phone calls 12 hours a day, customers want to know we will remain in business and have a credible strategy. Without that, why would they invest in our products. Where is it???
  • TongueInCheek
    You asked - Why on earth, given all the time management have had, could they not have had a business plan prepared when they filed in January?

    Because The Monitor, The Courts, The Creditor Groups, The Board of Directors and The Bond Holder Groups all have to approve the Business Plan.
  • stillnosubstance
    But they hav nothing to approve. No direction, no strategy, no vision, no plan. They should have had this prepared pre-filing. All that is happening now is knee-jerk responses to the finances - we need to save $300M a year - ok let's cut some more jobs, about 3200 should do it. Where from? I don't know Stanley, just cut them!
  • BornCanadian
    That's how it ends, when CEO from making a toasters will run Telco company
  • TongueInCheek
    This needs to be considered from a different perspective from January 14th forward.

    Let's say you are one of the major Creditors such as Flextronics. Would you willingly relinquish your rights under law to analyze, review and make recommendations on a Business Plan to protect your vested interests, allowing Nortel to execute a Business Plan crafted prior to CCAA/CH11?
  • less
    Pre -January 14th: Mike is the Saviour
    Post-January 14th: Mike is the Victim

    This conveniently leaves no timeframe to blame Mike Z for Nortels collapse: "I'm just a patzy."
  • Qique13
    I agree with Another_Nortel_Watcher!
  • McBeese
    "...But with the unprecedented economic environment and resultant impacts on revenues, significant changes are required to regain our financial footing."

    I see red every time this incompetent, impersonal, imbecile plays the victim card. How could he have the gall to blame Nortel's woes on the economy? He must really believe it - which makes my imbecile comment an understatement. No question the economy is challenging and business is down in the telecom sector, but that is not at the root of the erosion of 99% of Nortel's value... KNUCKLEHEAD!!
  • yes4aapl
    I see red every time this incompetent, impersonal, imbecile plays the victim card.
    ====
    re
    I think it was much earlier than the economy going south...
    It has started on that CC Q12008 I think, when Mike and Pavi lied straight into analysts' faces... about single digit growth of revenue, about deferred revenues, about operational margins improving!
    That was a blatant lie long before economy collapsed.
    The stock got hit badly ever since.
    Lies and frauds, that's what caused NT to collapse.
    NT stock and Nortel corporation.
    Wapuka1 who knows Nortel in and out, he stated that accounting is still a mess! Links available.
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