National News

Nortel CEO Mike Zafirovski steps down

Posted August 10, 2009

— Mike Zafirovski is out as chief executive officer at Nortel, and four-time N.C. Gov. Jim Hunt is no longer on the board of directors at the bankrupt communications gear maker.

Zafirovski left his position Monday as part of a management shakeup at Nortel. The Canadian-based company, which employs some 1,800 people in the Triangle, has been in bankruptcy since January.

Zafirovski also lost his seat on the board.

Nortel slashed its board to three people from nine, replacing board chairman Harry Pearce. According to Canadian media, Pearce played a key role in recruiting Zafirovski away from Motorola in 2005 in an attempt to turn around a company that had been in financial difficulty for years.

Zafirovski also left just two days after an interview with the Ottawa Citizen in which he said he planned to leave the company.

David Robinson, a member of the board, took over as the new chairman.

Nortel’s board members chose to resign, according to the Toronto Globe and Mail.

According to BusinessWeek, Hunt has been a member of the Nortel board since 2005, serving as an independent director, chairman of the nominating and governance committee and a member of the audit committee.

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

Zafirovski presided over a disheartening series of work force cuts and restructurings, and most recently the selling off of assets.

Pearce said in a statement Monday that Zafirovski made progress on getting the company past its prior accounting scandals and legal issues.

He said it was unfortunate the transformation was derailed by a deteriorating economic climate and the company's legacy cost structure.

"We've reached a logical departure point," Pearce said in a statement. "Mike made a commitment to see the process through the stabilization of the company, sale of its largest assets and the right plans and people to continue operating our business and serving customers. He has done so. I appreciate the commitment and passion he brought to this company since day one, including his guidance through the extremely difficult decisions we faced since filing for creditor protection."

(The Associated Press also contributed to this report.)

20 Comments

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  • samdutes Aug 10, 6:31 p.m.

    annieaamrm - This is true, started with John Roth buying up all the companies trying to keep up with Cisco, then on the the crook Frank Dunn who cooked the books. But had Zeroman and his cronies, and the BoD henchment kept the two Gary's we'd be a much different company today. No, not all the blame should be put on Zeroman, but he's just as big if not bigger liar than the previous crook CEO's.

  • sorry Aug 10, 6:18 p.m.

    I worked for them in the late 80's I liked it a whole lot best place to work back then,And family day wow that was a blast I guess all good things must end sad, It was a very nice co

  • CrewMax Aug 10, 5:04 p.m.

    "Top Heavy leadership + Lean Six Sigma = Disaster."

    You are a master chef, my friend.

  • Axtel Aug 10, 4:18 p.m.

    Top Heavy leadership + Lean Six Sigma = Disaster.

  • annieaamrm Aug 10, 3:59 p.m.

    I do believe this mess has been on ongoing contribution by the management executive staff for most of the past 10 years ... :-)

  • annieaamrm Aug 10, 3:57 p.m.

    nerdlywehunt - I worked at NORTEL, started off in Canada and they transferred me here to RTP to than lay me off serveral years later. I have to say that the cost per employee in RTP was one of the highest and I do know that in general (job for job) salaries paid were higher in the US vs in Canada. Also, at the time that I was laid off the serverances in RTP somewhat matched what the employees in Canada got. Hard to compare the two as what may be a benefit in the US, is somewhat government funded in Canada(by peoples tax dollars) I believe that NORTEL evaluated (past tense as I've heard sererances were cut this past January) serverances in all countries to determine what it should/needed to include.

  • howdiditgettothis Aug 10, 2:44 p.m.

    love to see what his "exit" package was worth? was it listed anywhere?

    i agree these worthless ceo's are ruining not only our country's business profiles, but helping send our government into headlong debt itself.

    i have posted many times about "generational indigence" ruining our government.........and i now have to add to the wealthy to list.

  • delilahk2000 Aug 10, 2:37 p.m.

    Over paid useless CEO's are destroying this country. They are not worth the pay they get, while the real workers get paid little to nothing, and half the time the (CEO'S) are not even working. I say get rid of all CEO'S and companies would do a lot better.

  • time4real Aug 10, 1:47 p.m.

    where's the news coverage on being the 4th highest taxed state in the nation WRAL!!!!!!!!!!!!!!!!

  • LuvLivingInCary Aug 10, 1:14 p.m.

    having jim hunt on the board is enough to ruin any company..

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