Electronics Production | March 05, 2009
Nortel develops restructuring plan
Nortel Networks has appointed CFO Pavi Binning to develop a restructuring plan that is to help the company in its recovery after the insolvency filing. The company is particularly trying not to be broken up, but has to pay suppliers while restructuring.
This comes after a reported $2.14 billion loss in its 4Q fiscal report. "Work is taking place across Nortel to develop a comprehensive plan to restructure Nortel into a more focused, leaner, and more competitive company," the Nortel president and CEO Mike Zafirovski is cited in a informationweek article. Nortel has scheduled a restructuring plan for its creditors by April. First measure is the preciously announced layoff of around 3,200 jobs from its workforce. However, the company will beforced to pay some creditors (e.g. Flextronics) immediately, while the company in turn has to wait for end-user customers to pay. The company also announced the layoff of 45 employees from its Israeli operations. This measure is due to the chapter 11 filing of the company and a decline in demand for its products.