Nortel Networks is to lay off 3,200 staff worldwide over
the next few months as part of business and financial restructuring
plan to pull it out of bankruptcy protection.
The one-time networking colossus has become the first major
vendor casualty of the recession after it filed for Chapter 11 in
the US and bankruptcy protection in its native Canada.
It has already let go 1,800 staff but Nortel president and CEO
Mike Zafirovskiconfirmed late yesterday that it will reduce the
workforce further.
"Nortel is a company driven by people and innovation. But with
the unprecedented economic environment and resultant impact on
revenues, significant changes are required to regain our financial
footing," he said.
"Tough decisions are being made to restructure the company and
work towards a successful emergence from creditor protections,"
Zafirovski added.
Earlier this month, a Canadian court extended Nortel bankruptcy
protection that will safeguard it from lawsuits and creditors
demand until 1 May 2009.
The company said it was taking the cost cutting activity in a
"disciplined fashion" to maintain the appropriate level of internal
resources to manage customers.
On top of the workforce reduction, Nortel will not pay staff
bonuses under the Annual Incentive Plan (AIP) and will terminate
equity-based compensation schemes for last year and this. In 2009,
AIP will be paid on a quarterly basis.
When all the cuts in staffing levels are made, Nortel will
employ 25,000 heads worldwide.
This story originally appeared on
Microscope