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Nortel: How a Fabled Company Fell So FarNortel: How a Fabled Company Fell So Far

Everyones wondering how exactly Nortel got to where it stands now: bankrupt and losing its reputation, not to mention money. Find out what several Nortel observers from analysts to former employees think of the companys downfall and its future.

Kelly Teal

July 20, 2009

7 Min Read
Nortel: How a Fabled Company Fell So Far

Dozens of news stories have run in recent months speculating about “what went wrong with Nortel Networks Corp..” So we decided to let ex-Nortel employees and several industry players tell it in their own words. Our oral history reveals the point when the 114-year-old company really started to go off track: a cultural shift from quality product output to a focus on shareholder value. Not to mention, successive years of bad management and financial scandal.

That Nortel is headed for a breakup of some kind is no secret. What no one does know is who will end up owning the storied Canadian telecom equipment maker, and which divisions. Indeed, Nortel was slated to emerge from bankruptcy this month but now it will go up for auction because several entities oppose a Nokia Siemens Networks takeover of the wireless assets.

The tale of Nortel has spun into a soap opera; however, unlike those far-reaching storylines, this one stands to impact real people in real ways. Pensioners, many of whom, sources say, are widows of former Nortel workers, could lose up to 40 percent of their income. (The average Nortel pensioner is 71 years old, receiving $1,000 per month.) Canada is watching its R&D cash cow and one of its top job creators disappear – scenarios that are never welcome, yet especially not in a recession. All the while, no one seems to be holding CEO Mike Zafirovski, his senior executives or the Nortel board of directors accountable for the downfall of the company. Of course, Nortel’s undoing did not happen in just the past three years.

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About the Author(s)

Kelly Teal

Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC. Follow her on LinkedIn at /kellyteal/.

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