Recent rumors of CEO Mike Zafirovski's impending departure from Nortel were true; the company announced his departure today.
Here's the money quote, from Harry Pearce, Nortel's Chairman of the Board:
Mike came to Nortel to transform this company. He made great progress on many fronts including addressing significant accounting and related legal issues; improving the quality of Nortel products and the company's cost structure. His ambitious vision helped shift the economic center of the company from legacy to growth investments. It was unfortunate the transformation was derailed by a deteriorating economic climate and the company's legacy cost structure. The operating improvements and strategic investments made during his tenure significantly contributed to the fact that Nortel's businesses are so attractive to potential buyers today.
Mike Z-bashing has been popular and not entirely unjustified, but I think the two factors that Pearce cites are, ultimately, the lion's share of what brought Nortel down--if by "legacy cost structure" you mean "financial scandals and scandalously poor decision-making with regard to acquisitions." Nortel wasted a lot of money buying companies they shouldn't have bought. The economic climate didn't help, but I wouldn't have put it first on the list. The economic climate's hit everyone in the communications business, and only one major vendor is in bankruptcy.
The release states that Nortel's business units will report to Pavi Binning, the Chief Restructuring Officer, while George Riedel, Chief Strategy Officer, will lead merger & acquisition work.
In addition, the Nortel board has been reduced in size from nine positions to three.
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