RealTime IT News

Nortel Simplifies Structure

Nortel , a network equipment stalwart looking to rebound after a series of setbacks, is reorganizing to simplify its business model and trim costs.

The move establishes two product groups each with its own president: Enterprise Solutions and Packet Networks, led by Steve Slattery; and Mobility and Converged Core Networks, led by Richard Lowe.

The Canadian company, which competes with Cisco , Lucent and other vendors, is also forming four regional teams to push its products to customers sooner.

As part of the reorganization, Malcolm Collins, who has served as Nortel's president of enterprise networks since 2002, will leave the company. He was responsible for business development, products, sales and marketing to large corporations.

Collins joined the company in 1992 and worked his way up through a number of leadership positions. A spokesperson for Nortel declined to provide further details of Collins' departure.

Nortel has worked hard to put an accounting scandal behind it. It fired former CEO Frank Dunn, CFO Douglas Beatty and several other senior executives.

It also cost the Canadian company approximately $200 million to restate earnings statements. What's more, the company is still in the early stages of defending itself from class-action shareholder lawsuits.

Company officials have also taken heat for the resignations of President and COO Gary Daichendt and CTO Gary Kunis.

The executives were on the job only three months before resigning because their management styles clashed with CEO Bill Owens.

Owens outlined steps the company has taken to prevent any future ethical problems. He also tried to convince attendees that the company is back on track and is focusing on increasing its revenues and cash reserves and cutting costs.

He cited several potential growth areas: the acquisition of PEC Solutions to increase its presence in the federal government market; a joint venture with LG Electronics; and efforts to expand in markets such as China, India and South Korea.

Also promising are security and voice-over-cable, he said.