Nortel realigns business units into product groups

Slightly more than a year after the company realigned its corporate business divisions from product groups into customer groups, Nortel is reordering them again based on product groups, the company announced today. Instead of being divided into an enterprise group and a carrier group, as was established last summer, Nortel will be divided into two main units: the Enterprise Solutions and Packet Networks group, and the Mobility and Converged Core Networks group.

“By creating two product groups, Nortel greatly simplifies its business model and creates new cost-efficiencies by leveraging common hardware and software platforms,” the company said in a statement issued today, citing convergence trends as a key motivator behind the realignment.

The move comes slightly more than a year after Nortel’s last corporate makeover, in which it realigned its wireless, wireline and optical product groups into two customer-centric business units: Enterprise Networks and Carrier Networks. That change came amid a North American management shakeup and a 10% reduction in overall workforce.

At the time, chief executive officer Bill Owens explained the change this way: “We’ve come to realize that when we’ve, in the past, gone to carriers with essentially three different product lines--wireless, wireline and optical--it was confusing to the customer in some cases,” he said. “We didn’t realize the cost synergies or product synergies of going with a consolidated effort.”

Malcom Collins, who was named president of Nortel’s Enterprise Networks group upon its inception last year, will be leaving the company, Nortel announced today. The new ESPN group will be led by president Steve Slattery, and the MCCN group will be led by Richard Lowe.

The company has also created four regional teams to respond quickly to customers and tailor offerings to meet the specific needs of individual clients. The North American group will be led by Dion Joannou, who became president of Nortel’s Caribbean and Latin America group in late 2002 and was named chief strategy officer amid last year’s realignment, tasked with guiding partnerships, new markets and acquisitions. The Eurasian group will be led by Steve Pusey. The Greater China group will be led by Robert Mao and the Caribbean, Latin America and Emerging Markets group will be led by Martha Bejar.

Sue Spradley will remain president of Global Services and Operations.