Management Toolkit

Story: Nortel Asia-Pacific plans major restructuring

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Sad decline for Nortel...

Call me a pessimist but talk of 'strengthening' a financial position alongside the 'shredding' of business units does not sit comfortably.

Once valued at USD 251 billion, Nortel is now worth closer to USD 156m and has cut its workforce by over 75% worldwide.

Although it is facing tough competition on all fronts - Nortel struggled to recover from the after-shock of the bursting of the dotcom bubble. I remember seeing a major Nortel TV ad campaign during primtetime evening around 2001-2002 - a friend commented - 'who are Nortel and why on earth should I care?'. It was a classic slick corporate campaign that summed-up the inflated hyperbole attached to tech companies at the time. Nortel were not alone in making the assumption that they could 'afford' to raise their public profile - fortunately most of the others simply had their marketing fingers burnt rather than sliding down the corporate ladder.

So what next? - an article in the Economist speculated that they would be broken up and sold in parts to rivals (Huawei were mentioned as one potential buyer).

Is this an ominous warning for other tech companies? possibly but others that recovered from the dotcom bubble seem to be steadier in these rockier times, and the tech and telecoms sectors are still being touted as defensive whilst banks, retailers and builders are battered.

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