- The Washington Times - Tuesday, August 11, 2009

TORONTO (AP)| Nortel Networks CEO Mike Zafirovski is stepping down from the troubled telecommunications company, saying “a natural transition point” has been reached as the company continues to liquidate.

The company also announced Monday that its board of directors would be reduced to three, from nine, and that its second-quarter losses more than doubled, partly on reorganization costs.

Mr. Zafirovski, a protege of former General Electric Co. head Jack Welch, was named CEO in 2005 after serving as an executive at Motorola Inc. and GE.

He tried to transform Nortel but said the economic crisis changed the outlook dramatically, forcing Nortel to became the first major technology company to seek bankruptcy protection in this global downturn.

Mr. Zafirovski, 55, presided over a disheartening series of work force cuts and restructurings during his tenure, and most recently the selling off of assets. Swedish telecom company LM Ericsson agreed last month to buy parts of Nortel’s wireless business for $1.13 billion. The deal is subject to approval by the Canadian government.

Nortel said the company would ask accountants at Ernst & Young “to take on an enhanced role” in the oversight of the business, sales processes and other restructuring activities.”

Mr. Zafirovski said Nortel expects to find bidders for most of the remaining assets by the end of next month.

“It’s bittersweet,” Mr. Zafirovski told the Associated Press. “We did come with aspirations to fix what many people thought was a broken icon. Many people thought it was impossible and frankly we thought we gave it a great run. A year ago this time, we thought we were on the verge of a pretty significant turnaround, but the world turned upside down on us.”

Nortel is winding down a company with a 127-year history in Canada and has been in advanced talks to sell the rest of its operations.

Mr. Zafirovski had hoped to restructure and preserve Nortel since seeking bankruptcy protection in Canada and the United States in January, but then decided to sell the company off in pieces rather than attempt to emerge from bankruptcy as a restructured company.



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