Nortel Networks Corp. is finally parting ways with a painful symbol of its high times and dashed dreams.
The struggling communications-equipment maker yesterday announced the sale of its Brampton, Ont.-based corporate headquarters to expanding cable and wireless giant, Rogers Communications Inc.
Toronto-based Rogers is paying $100-million for the facility, which is almost one million square feet and has 63 acres of land. Nortel plans to move into two offices in the Toronto region; a sales studio and a bigger corporate centre.
Rogers is scheduled to take possession of the site on Jan. 4, 2006. Until Nortel moves into its new buildings it will lease office space from Rogers in Brampton.
The sale comes amid speculation in recent months that Nortel could move its headquarters to another city, though a spokeswoman said yesterday there are no current plans to do so.
Nortel's history with the Brampton site goes back just over four decades. In 1963, the company, then known as Northern Electric, opened the facility as a manufacturing complex for electro-mechanical switching equipment systems. In 1996, it converted the factory into office space.
By the dot-com boom, Nortel's stock was soaring and so was its work force. The Brampton facility, which boasts a health and wellness centre, and fitness facilities including volleyball courts, housed 3,200 employees in that period.
But by the end of 2000, the industry had changed drastically amid a slump in telecom spending. In the following years, Nortel's fortunes were reversed as its stock went into a freefall, and its work force was slashed by two thirds.
The Brampton facility started to take on the appearance of a ghost town as the number of workers there dwindled to under 1,000.
While Nortel had quickly adjusted its work force to the challenging times, it hadn't done the same with its real estate. The company is currently trimming its real estate portfolio in an effort to increase its profitability.
"This is another proof point that we continue to execute on our strategy of cost leverage through business simplification," Nortel's outgoing chief executive officer Bill Owens said yesterday in the news release. "A key part of this strategy has been to ensure that our real estate requirements are sized to the needs of current business realities."
Nortel spokeswoman Patricia Vernon said yesterday that the key functions at Brampton -- global operations, Canadian sales, enterprise solutions, finance, human resources, information services, and law will move to the new Toronto area offices, which have not yet been finalized. NT (TSX) fell 16 cents to $3.99.
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