TORONTO Nov 18 Even as losses and layoffs
mount at Nortel Networks Corp NT.TO NT.N and analysts raise
questions about the telecom equipment maker's future, its chief
executive continues to believe the company can win market share
In an internal memo sent to employees on Tuesday and
obtained by Reuters, Mike Zafirovski urges employees to "work
to drive down costs and drive up sales" and "understand the
realities of a tough marketplace, but use them to seize share
and have faith that we will succeed in the end."
Zafirovski's remarks come about a week after Nortel posted
a quarterly loss of $3.4 billion and announced yet another
round of sweeping cost cuts, including 1,300 layoffs to its
Following the financial report, at least one analyst said
he believes things have gotten so bad at Toronto-based Nortel
that the company will have to fund its operations through asset
sales, and it risks running out of money before 2011.
Another analyst said last week that Nortel cannot succeed
as it exists today and the setbacks it faces make it attractive
only to investors who are betting it will be broken up or
But Zafirovski's memo, which a Nortel spokesman confirmed
was sent to workers, suggests the company sees a very different
"I believe Nortel can be a strong partner for our customers
today and for the long-term," he wrote. "Today, we have leading
innovations and solutions ahead of the market and people who
know how to deliver the business value our customers need."
Nortel's fortunes have soured as telecom companies scale
back spending on the equipment it makes. At the same time, the
company faces intense competition from European and North
American rivals such as Alcatel-Lucent ALU.N and low-cost
Asian vendors like Huawei Technologies [HWT.UL].
Nortel's stock has plunged from more than C$1,100 in
mid-2000 to close at 67 Canadian cents on the Toronto Stock
Exchange on Tuesday, down 8 Canadian cents, or 11 percent.
The company has responded to the downturn in its business
with round after round of cutting costs.
"We are creating a leaner, more streamlined company that
can be agile and responsive to our core customers," Zafirovski
wrote in the memo. "By building a more cost-effective and
productive organization, we give Nortel a chance to succeed."
(Reporting by Wojtek Dabrowski; editing by Rob Wilson)