Telecommunications equipment manufacturing company Nortel Networks Corporation has announced that CEO Mike Zafirovski will be stepping down. This news takes place at a time where the company is restructuring. Zafirovski was with Nortel for over three years as he was attempting to help turn around the company.
“A combination of businesses running well, good progress on the sale of (Nortel’s) businesses (under bankruptcy protection) and having just certified second-quarter results, we thought this would be a natural point” stated Zafirovski in reference to stepping down from the Board.
In February 2007, Nortel reduced their workforce by 2,000 employees. One year later, an additional 2,100 were reduced. The company announced that they were shutting down their Calgary, Canada campus by 2009.
The number of Board members with Nortel is being reduced to just three people. Previously there were 9 execs on the board. Ernst & Young Inc. (E&Y) will be enhancing their role in helping restructure the business under the Companies’ Creditors Arrangement Act proceedings according to the WSJ.
E&Y will also work in identifying a principal officer for Nortel in U.S. Chapter 11 proceedings. This officer will also work with the U.S. Creditors’ Committee. The officer will be subject to approval from U.S. courts. Nortel’s current Chief Restructuring Officer is Pavi Binning.
The company had a cash balance of $2.56 billion at the end of the quarter. Nortel was removed from the NYSE in January and the Toronto Stock Exchange in June.