MANHASSET, N.Y. In a precursor to possibly more sweeping organizational changes, telecom equipment supplier Nortel Networks Corp. announced Wednesday (Nov. 30) that two long-time executives were leaving the company.
A company spokesperson confirmed a Reuters
report that 28-year veteran and chief research officer Brian McFadden would leave the company, as well as 18-year veteran Sue Spradley, the company’s global services and operations president.
In the interim, Peter Carbone, vice president and chief architect, would assume McFadden’s duties while David Downing, vice president of global services and operations, would assume Spradley’s duties, the spokesperson said.
The spokesperson said the changes were part of a company reorganization announced Monday. She did not reveal what other changes were planned.
The departure of two Nortel veterans appears to bear the stamp of new Nortel CEO Mike Zafirovski
, a former Motorola executive, who took over the company’s reigns Nov. 15 and appears to be wasting no time cleaning house.
Zafirovski said his priorities include lifting operating margins to between 13 percent and 19 percent from the low single digits, and focusing its research and development spending.
The new CEO’s moves are being heralded by analysts long dissatisfied with the company’s lackluster earnings.
"In our view, the new CEO has started taking aggressive measures toward rightsizing Nortel's business model," UBS analyst Martin Cecchetto was quoted as saying in a Forbes
"We believe these steps are early signs of a more significant reorganization with further executive and non-executive reductions and changes expected," the analyst added.
More upheaval appears a certainty for troubled Nortel, which has for over a year struggled with the fallout from an accounting scandal where the company’s stock price plummeted, financial reporting delays mounted, and shareholder trust in the company eroded severely.
three of its former executives for $10.5 million for their role in the accounting scandal, which also led to the ouster of seven other executives and the loss of 3,500 jobs in August 2004.
Former CEO Bill Owens, hired in the midst of Nortel’s accounting crisis, did his best to right the ship and managed to help narrow
the company’s loss in its most recent fiscal quarter.
But Owens too came under fire from people inside and outside the company. He wound up publicly apologizing
for Nortel’s fiscal condition to irate shareholders at the company’s annual shareholders meeting in June.
Owens left Nortel in October.