A sad turn of events for a company that was once a cornerstone of the telecom industry. For while the sale of those divisions would generate some much needed cash, they would also make it tougher for Nortel (NT) to emerge from bankruptcy protection as a viable company.

“There is nothing more difficult than notifying employees, and Nortel is extremely conscious of the personal financial burden this will cause affected employees and their families,” CEO Mike Zafirovski said in a statement. “Nortel is a company driven by people and innovation. But with the unprecedented economic environment and resultant impacts on revenues, significant changes are required to regain our financial footing. Tough decisions are being made to restructure the company and work toward a successful emergence from creditor protection.”

Tough decisions indeed. Employees given the sack will not receive severance packages, which Nortel suspended when it filed for bankruptcy protection last month. “We do not have the flexibility, particularly in North America–Canada and the U.S.–for us to be paying severance pay,” Zafirovski told Reuters. No word yet on whether the company has the flexibility to pay Zafirovski’s 2009 bonus…