No Christmas in Nortelville

Nortel has sacked so many employees in the past eight years, it’s a wonder there are enough pink slips left in human resources to inform those who remain of their termination.

The company’s workforce, which numbered nearly 95,000 in 2000, was cut to about 30,000 earlier this year. And now it’s to be cut further still. This morning, the troubled maker of communications equipment reported an ugly third-quarter loss of $3.4 billion and announced plans to reduce its work force by five percent. Together with those 1,200 previously announced layoffs, Nortel (NT) will sack some 2,500 employees. That’s almost as many as lost their jobs in Nortel’s last bloodbath–a reduction that eliminated 2,900 positions. And this time around, some high-ranking executives are leaving along with the rank and file. Among them: CTO John Roese, CMO Lauren Flaherty, Global Services President Dietmar Wendt and Executive Vice President of Global Sales Bill Nelson.

Once a high-tech darling, Nortel has spent the past several years trying to recover from the general downturn in the telecom industry and a massive and debilitating accounting scandal. “We are on a journey to rebuild this company,” goes the now familiar refrain sounded quarterly by Nortel CEO Mike Zafirovski on the company’s earnings calls. But these days, even the undaunted Zafirovski sounds beaten into submission. “In September, we signaled our view that a slowdown in the market was taking place,” he said in a statement. “In the weeks since, we have seen worsening economic conditions, together with extreme volatility in the financial, foreign exchange and credit markets globally, further impacting the industry, Nortel and its customers. We are therefore taking further decisive actions in an environment of decreased visibility and customer spending levels. We are acting quickly to become a simpler and leaner company.”

A leaner company. Yeah, that’s a good way to describe it.