Nortel Announces Layoff Surplus
by John Paczkowski
Posted on February 25, 2009 at 10:17 AM PT
More brutal news from Nortel today. The troubled telecommunications gear maker plans to sack an additional 3,200 workers world-wide over the coming months. Taken together with the company’s previously announced 1,800 layoffs, total job reductions will top out at 5,000. When they’re completed, Nortel’s workforce will number about 25,000, down 16 percent from about 30,000. And there may be more cuts in the months ahead: Nortel says it cannot promise that today’s layoffs are its last.
“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 toward a successful emergence from creditor protection.”
Tough decisions indeed. Employees given the sack will not receive severance packages, which Nortel suspended when it filed for bankruptcy protection last month. “We do not have the flexibility, particularly in North America–Canada and the U.S.–for us to be paying severance pay,” Zafirovski told Reuters. No word yet on whether the company has the flexibility to pay Zafirovski’s 2009 bonus…
