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Turnaround stalled, Nortel shrinks again

CATHERINE MCLEAN

Globe and Mail Update

Latest comment posted at 3:54 PM EST 28/02/08

Struggling telecommunications equipment maker axes 2,100 jobs, plans to move 1,000 more amid continuing restructuring ...Read the full article

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  1. D K from Canada writes: I think I posted 2 years ago to lay everyone off for a year......still doing the slow bleed eh?
  2. Serafina Superbo from the heart of the matter, Canada writes: It's amazing there's anything left to cut. Can't they find someone to buy them out of their misery?
  3. Mike McFee from Ottawa, Canada writes: They have already let people go in Ottawa a few weeks ago, old news and as the previous post said, a slow bleed.... Ottawa still has far too many middle managers..

    And why don't companies like this get corporate welfare like the car companies.... lol
  4. The Oracle from Caiman Islands, Canada writes: Another reminder we are now sellers of rocks & oil
  5. James Young from Brantford, Canada writes: Nortel slashes jobs, loses $844-million on $1-billion charge
    So what's new?
    Stock $11.21 this is after the 10 for 1 split. The real price is aout $1.11, about the same as before the split. It will ve hard to do another sleight of hand.

    Blue suits and a gift of gab a company do not make. The Taj Mahal buildings are nice though.

    Durgan.
  6. Lowen Wrainger from Canada writes: That's it, I'm giving up on so called Hi-tech jobs. Too much of a roller coaster ride, and besides the Chinese will do all that stuff for the same kind of U.I. money that Steven Harper gives to Ontarians.(zilch) Yep, going back to true Can-eh-jun roots and learn how to paddle a canoe and trap beaver. What? The foreign national companies have bought 99 year lease on all our crown land! OK. Send me to Afganistan or trade me to some other Any-Shell team!
  7. The Skipper from Canada writes: Nortel Loses $844 million
    GM Loses $38 Billion
    The Skipper should lose a Billion or two and see what the bank would say.
    It all speaks to Recession, Recession, Recession !!
    Batten down the hatches because it is going to get worse !
  8. John Connor from Around Town, Canada writes: Nothing that another re-statement of earnings for the last decade woouldn't fix I guess.
  9. Stude Ham from Canada writes: cheap foreign labour... what a totally original idea...

    motorola/nortel business venture??? is motorola still there???

    the nortel death by a thousand cuts is like the battery bunny... it just keeps on going and going and going...
  10. Lyn Alg from Canada writes: This action is tantamount to a sinking ship throwing everything overboard hoping it will save the ship. Dream on, my laddies ! And now a song by Ms. Celine Dion - 'My heart Will Go On'.
  11. scamp the from Canada writes:
    Nortel is dead. It died a long time ago because it was run like crap. Ask anyone who worked at the company, it was literally run like the federal government (meaning, a lot of people doing nothing).

    But this is good. The death of nortel has meant a better, much more vibrant ottawa high tech sector. Now imagine if we would let the big 3 automakers die, maybe a better canadian auto company would prevail.

    ponder that for a second. If we had put all our canadian resources in nortel, would RIM have been formed?
  12. A Curmudgeon from Mississauga, Canada writes: If the cost reductions of $300,000,000 annually are obtained through the reduction of 2100 employees, it is pretty easy to calculate the source of Nortel's problems. This equates to an annual cost of $142,857 per employee. Although this amount presumably includes salary and benefit, it seems pretty high - even for a high tech company.
  13. Tkk Z from Canada writes: Nortel, why not just declare bankruptcy and get it over with? Nobody care. Sell all of your intellectual properties to RIM for $1, for safe keeping. Auction assets on eBay, take the money and run.
  14. J Broomer from Canada writes: As an aside to A Curmudgeon's comments on the cost per employee, you have to also remember that this includes every little cost, real estate (you have to house them somewhere, hardware (desks, computers, etc), telephone and data services. You'd be amazed at how fast that all adds up.
  15. Susan Anon from Victoria, Canada writes: Well, at least that saves us a lot of money in government subsidies and handouts. I mean, obviously a business that says it is moving 1000 jobs off shore should not receive a dime from our provincial and federal governments to prop up their business. They want to open up shop in other countries, they should get their subsidies from where they are moving the jobs to.
  16. Jay D from Canada writes: Salaries were never slashed at Nortel as far as I know. HW and ASIC people pulling 150k plus during the bubble are still making that if they survived. Some managers went back to tech work and kept manager salaries. Meanwhile the norm outside was 10-20% wage compression or roll backs.
    Nortel is a sad story. There are still some very bright technical people working there but management seems either incapable of making necessary changes or clueless.
  17. Kothar Rumbleg from Canada writes: Can you believe that this company ACTUALLY believe this company had a market cap of nearly $400 billion in 2000? Now look at the shambles that remain.
  18. Auroran Bear from Montreal, Canada writes: I still own a few shares of this piece of poop. I keep them as a reminder to always do my homework before investing in something. I heard someone this morning put this in the proper context when they said "What, they still had 2100 employees?"
  19. andy bob from Canada writes: I worked at Nortel. The problem since 2000 is that everything is being outsourcing. Probably much of the reason is so it can be an expense not an overhead. They layoff the Nortel experts and get someone in India or another third party to do the job. This results in an inexperienced person that also has to learn all the Nortel tools and procedures. In every single case this leads to a poor quality product, excessive cost and delays. Many of the experts that are left are delegated to baby-sit the contractors. This consists of teaching contractors the Nortel tools, fighting with accounting, shipping etc. Some of those middle-men between NT and the contractors are sure getting rich however.

    Also, the culture has been destroyed. People would kill to work at Nortel when I started, now we can’t get a co-op student that wants to show their face in the building.

    All this can be blamed on over paid clueless executives that come and go, make the same mistakes over and over with no accountability.
  20. Com Menter from toronto, Canada writes: Whatever
  21. wawa dave from Black Mountain SK, Canada writes: ""Susan Anon from Victoria, Canada writes: Well, at least that saves us a lot of money in government subsidies and handouts. I mean, obviously a business that says it is moving 1000 jobs off shore should not receive a dime from our provincial and federal governments to prop up their business. They want to open up shop in other countries, they should get their subsidies from where they are moving the jobs to "" I agree totally!!
  22. pragmatic person from somewhere, Canada writes: I'm amazed at the calousness ouf the posters here about people loosing their jobs. Kind of sad actually. How can NA compete with low cost chineese labour? The playing field is by no means level. They steal our technology, ideas and produce clones at fractions of our costs. Besides, there are few companies left for our overeducated offspring to work at.
  23. Harry Jackson from Simcoe Ontario, Canada writes: Stockholders should not worry.

    They will just move the jobs to Mexico and the savings will be better than before! Stock will go up! Why worry about the employees, the can always collect UIC benefits and Welfare!

    It was just like the last increase Bell Canada aked for, siteing increasing costs from Nortel..hell they own it....
  24. The Middle Finger ..I.. from Canada writes: The company's work force had slipped to 32,550 by the end of December, 2007 from 94,500 in 2000.
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Slipped?

    Webster's defines SLIP as:

    slip1 —v. (-pp-) 1 slide unintentionally or momentarily; lose one's footing or balance. 2 go or move with a sliding motion. 3 escape or fall from being slippery or not being held properly. 4 (often foll. by in, out, away) go unobserved or quietly. 5 a make a careless or slight error. b fall below standard. 6 place or slide stealthily or casually (slipped a coin to him). 7 release from restraint or connection. 8 move (a stitch) to the other needle without knitting it. 9 (foll. by on, off) pull (a garment) easily or hastily on or off. 10 escape from; evade (dog slipped its collar; slipped my mind).
  25. Sue W from Canada writes: A Curmudgeon from Mississauga, Canada writes: ....This equates to an annual cost of $142,857 per employee. Although this amount presumably includes salary and benefit, it seems pretty high - even for a high tech company.

    It seems even higher for public service employees. Except we never hear about job eliminations to help with the bottom-line:

    http://www.fin.gov.on.ca/english/publications/salarydisclosure/2007/
  26. Sylvester McMonkey McBean from Ottawa, Canada writes: FYI, at Nortel, they don't talk about laying people off. They talk about "moving head count" to "low-cost centres of excellence" in "developing geographies". To be fair, it's the right thing to do and a good business move. Sometimes though, you rather wish they'd drop the b-school baffle-gab and just be up-front about the plans. Otherwise, the uncertainty may drive most of the employees who are left to look at "personal head count re-locations" to "alternate areas of enhanced employment stability" so they can sleep at night.
  27. X. T. from Canada writes: James Young from Brantford, Canada writes: Nortel slashes jobs, loses $844-million on $1-billion charge
    So what's new?
    Stock $11.21 this is after the 10 for 1 split. The real price is aout $1.11, about the same as before the split. It will ve hard to do another sleight of hand.
    ---------------------------------------
    The stock price before 'reverse splitting' was over $2. Now it's $1. Someone in the company said the 'reverse splitting' was a good 'investment strategy', while the history of reverse splitting has never shown this.
  28. scamp the from Canada writes:

    "Sometimes though, you rather wish they'd drop the b-school baffle-gab and just be up-front about the plans" LOL. If you really want a laugh...check out MERGE...they have a office in Toronto under Cedara software. I used to work there. When it was downsized, they called it...wait for it...wait for it. Rightsizing :) This was in all the official letters and in the speeches. Rightsizing is right.

  29. James Young from Brantford, Canada writes: X. T. from Canada writes: James Young from Brantford, Canada writes: Nortel slashes jobs, loses $844-million on $1-billion charge
    So what's new?
    Stock $11.21 this is after the 10 for 1 split. The real price is aout $1.11, about the same as before the split. It will ve hard to do another sleight of hand.
    ---------------------------------------
    The stock price before 'reverse splitting' was over $2. Now it's $1. Someone in the company said the 'reverse splitting' was a good 'investment strategy', while the history of reverse splitting has never shown this.

    It does work for some people. After the spit the stock was around $30.00 for awhile, and one poster on this site suggested Nortel was doing very well judging by the stock price. Reverse Stock splitting is to hoodwink and nothing more. Going the other way may have some merit. My opinion.

    Durgan.
  30. Teacher David from China writes: Hummmmm... my post didn't make it. And it wasn't anything G&M could get sued for. Oh well, next time I'll somehow implicate Prime Minister Harper in a negative way. Those all seem to make it into the posts. Way to go Leftist G&M! :)
  31. R. M. from Regina, Canada writes: And folks in Ontario think the Leafs are poorly managed? Nortel will soon cease to exist as a Canadian company when it is bought up by a foreign company for peanuts and blended in with the scenery.
  32. Duorp Naidanac from Canada writes: I wonder what John Roth is doing these days?
  33. D K from Canada writes: " Duorp Naidanac from Canada writes: I wonder what John Roth is doing these days?"

    Counting his money and laughing.
  34. Prairie Boy from Canada writes: A lot of mutuals in the US and Canada are not allowed to purchase stock under 5$. The reverse split allowed NT to be available to trade. The fact no one wants to buy it seems to have won out. I'm not too bad I got my capital and some profit out so these are "free" shares that remind me sometimes I am soooo dumb.
  35. Arthur Meighen from Chapter 11, Canada writes: Nortel? What dat?

    They should diversify into HD DVD manufacturing - it would be yet another stroke of Nortel's legendary corporate genius!
  36. Free Spirit from Halifax, Canada writes: A G&M article a few weeks ago stated that hi-tech companies are worried there are not enough graduates in computer science to met demand.

    But young people considering a career in computer science or engineering should pay careful attention to what is happening at Nortel. Notice how hi-tech jobs are being off-shored to India and China. Notice how readily those "valuable" Canadian hi-tech workers are discarded like used paper towels.

    How many ex-Nortel hi-tech workers are now flipping burgers, pouring coffee or sorting bottles at recycling depots ? (especially the older ones).

    Nortel clearly demonstrates that a career in hi-tech is not only risky, it is downright foolish.
  37. Bill Needle from Canada writes: andy bob from Canada writes: All this can be blamed on over paid clueless executives that come and go, make the same mistakes over and over with no accountability.

    Bang on right Andy.
  38. Mark P from Calgary, Canada writes: "Nortel clearly demonstrates that a career in hi-tech is not only risky, it is downright foolish. "

    Exactly! I know plenty of people who were working for Nortel, as relatively recently hired engineers, who were either laid off, or made irrelevant as the result of the changing scenery. Some people who had signed with Nortel straight out of college were severed immediately -- and some of them still haven't found replacement employment.

    The Canadian high-tech industry is a complete disaster, and there is no labour shortage whatsoever.
  39. Lou Bix from Canada writes: This Co needs to be taken out back and shot.
    I don't know who holds this dog. but I'm sure they shake their head every time they look at the stock price.
  40. D K from Canada writes: Turnaround? LOL. They have been saying that for 7 years. I am sure the CEO will still get his bonus for all his "hard" work. Grow up.
  41. Free Spirit from Halifax, Canada writes: "The Canadian high-tech industry is a complete disaster, and there is no labour shortage whatsoever."

    Agreed! And yet the G&M and other media publish articles regularly warning about an impending skills shortage in hi-tech and urging young people to enroll in computer science and engineering programs.

    The only skills shortage is new grads with 0-2 of years of experience, those at the lowest end of the pay scale. After 5-10 years of experience these people will be discarded (just as Nortel has done) and replaced with more low cost new graduates.

    My advice (speaking from experience): Stay away from hi-tech. It will ruin your life. Study a trade, law, medicine, dentistry, something that can't be off-shored or out-sourced.
  42. P I from Canada writes: Wonder if MikeZ will give back some of his $35Million that was used to get him to Nortel.

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