Nortel CEO Mike Zafirovski announced his resignation yesterday, on the same day the company posted a $274 million Q2 loss.
With Nortel's asset fire-sale well underway, Zafirovski and the board mutually decided that now was a good transition period. “We've reached a logical departure point,” board chairman Harry Pearce said.
Nortel's remaining business units will now report to chief restructuring officer Paul Binning.
Zafirovski took control of Nortel in 2005. It was under his watch that Nortel began a transition into a leaner business in an attempt to restore profitability.
“Although solid progress was made in many areas, at the end, the capital structure and legacy costs coupled with the economic downturn proved too difficult to surmount,” Zafirovski said.
Nortel subsequently filed for bankruptcy protection, and began the process of selling off company assets, including its wireless and metro Ethernet divisions.
Earlier this month, Nortel announced that Ericsson had submitted the winning $1.13 billion bid for the wireless assets, but that Nortel would hold on to a number of LTE patents.
Fellow Canadian company RIM had been keen to bid or the assets, in a purported attempt to keep the LTE assets Canadian-owned, but was reportedly offered discriminatory terms.
Now, RIM is attempting to convince the Canadian House of Commons to block the sale of Nortel's assets to Ericsson due to this discrimination.
Meanwhile, Nortel reported a second-quarter net loss of $274 million, compared to a $113 million net loss in Q2 2008.
Revenue fell 25% to $1.97 billion, with turnover falling in every business unit. Nortel said the economic downturn and continuing creditor uncertainty were to blame for this decline.
Nortel did manage to shave nearly $280 million from its costs - with operating expenses falling to $738 million - and improve its cash balance by around $80 million to $2.56 billion.