claytondennis

Nortel Networks: 5 Big, Unanswered Questions

Nortel cuts 1300 positions -
Mark raises some good questions regarding cuts at Nortel and Mike Z's ability to act strategically. History has shown - far too many times across far too many companies - that across the board layoffs do not work and only compound issues of employee productivity, loyalty and overall efficiency. More importantly, it is the real fix needed in the long term. The current environment of Nortel, like others before them, only serves to paralyze their work force. If Mike Z was serious about productivity and profit for the long haul he would due well to be more surgical and strategic in his approach. i.e., what core company functions and markets need attention, what restructuring measures are required to help the company operate more efficiently, where can costs be reduced other than through arbitrary layoffs, how best to identify poor (employee) performers and then reinvest in a better skill base, and finally get the Board to buy in to the 3-5 year quality and productivity improvement plan. Is a fundamental restructuring of Nortel required? Certainly appears that way. Has this indeed been done? Probably not. So, in an economic and business climate that requires agility, Nortel will no doubt continue to spiral downward as a marginal company with great potential not realized. As Mark points out, Mike Z may be a good sales and finance guy but those are not the essential core competencies for CEO's in today's business environment.