Nortel describes 'deteriorating' scene

Nortel will also realign its corporate structure into three vertically integrated groups, two of which (its Metro Ethernet and Carrier Networks units) will serve carriers and one of which will serve enterprises. That realignment will require the departure of several senior executives, Zafirovski said, including Chief Technology Officer John Roese, Chief Marketing Officer Lauren Flaherty, global services head Dietmar Wendt and head of sales Bill Nelson.

“We’ll have significantly fewer functions at the corporate level,” he said.

The CEO declined to say much about the ongoing sale of Nortel’s Metro Ethernet business other than that the company was talking to interested parties about it and that he “wasn’t blind” to the potential of partnerships as well. Though Nortel has stated a preference to sell the business for cash, several analysts have noted that, in this climate, Nortel will have a tough time finding a buyer with the level of cash on hand that Nortel is likely to want. One analyst wrote last week that more than 30 potential acquirers had expressed interest in the assets, but the same analyst said Nortel may ultimately choose not to sell the business after all.

Zafirovski also conceded that valuations of companies industry-wide had dropped since Nortel’s decision to sell the Metro Ethernet business and that the vendor is proceeding to discuss possible deals with “a smaller number of players.” Though Nortel announced only two months ago that it would sell that business, Zafirovski said today, “The world has changed since then.”