Nortel Insider – by Desk Jockey

Richard Lowe, President of Carrier Networks recently sent an email to all the employees under him in an attempt to demonstrate the same openness and transparency that Mike Z has: Link to All About Nortel article with the full text of the letter.

Let’s have a quick analysis of the contents:

The past several weeks have been the most challenging of my career, and no doubt they feel the same for many of you. While things are difficult from where I stand, I know that in many ways they are even more difficult for you and your families, and I thank you for hanging in there and continuing to fight this difficult battle together.

Translation: My bonus won’t be as big for 2008 so I’ll have to defer some spending, like a new beach house or something. Things must be way worse for you guys! To those we didn’t terminate: Thanks for sticking around and remember that we’ll fire you if we find you looking for an opportunity elsewhere.

I’ve now spoken with virtually all our tier one customers, and most of our tier two and three customers, and they are universally supportive of Nortel and the steps we’re taking.

Translation: Please don’t read the Q4 and Year End results due out on monday as they will reveal the full extent of our lies.

Despite our disappointment with Verizon’s phase 4 announcement, our LTE solution has gained traction with KDDI and TMO International. We must shake off any disappointment and focus on meeting our LTE program and trial milestones while we continue to explore partnership options for our LTE solution.

Translation: Please ignore the utter abject failures of upper management in destroying Nortel’s credibility and continue to work hard so that we executives can continue to extract every last penny, nickel and dime from this company.

Incentive programs like those announced today are aligned to both our creditor’s goals to quickly and cost effectively restructure the business, and our own to ensure that employees are encouraged to drive forward in the face of an extremely difficult environment.

Translation: Yay! KEIP will help make up for my bonus short fall this year! Guess things won’t be that bad for me after all!

I’d like to thank everyone that is being impacted for their many contributions to the company, and for the sacrifices they’ve made on Nortel’s behalf. I ask the rest of you to be supportive of these individuals at this difficult time and at the same time to remain focused on our business priorities as these changes take place, so that one day we can perhaps welcome our co-workers back to a revitalized and growing Nortel – one that the rest of us are tasked with recreating.

Translation: If you don’t continue to work blindly hard for us, you’re doing a great disservice to those terminated without severance! Yes, that makes perfect sense!

How this man can continue to lead is beyond me. This corporate shill ignorantly assumes that those betrayed and mistreated employees who were terminated without severance will be begging and crawling to rejoin Nortel CN under his leadership should any opportunity arise. He acts as if these people cannot live without Nortel and that Nortel is life for them. Furthermore, he even suggests that those remaining workers are wholly responsible for whether their laid off counterparts are given a chance to return! Yet another example of management shoveling the blame onto the rank and file.

Such behavior is more outrageous than any Youtube video someone could come up with!

Part 7 has been rushed to production so that those laid off can have one last chance to watch it before the soulless executive ruthlessly terminates them without severance and kicks them out on to the street.

Irregardless of their hateful actions, don’t let them take away your dignity. YOU are who you are no matter what they’ve done to you or how shameful they have behaved. Don’t lose your pride!

There are many who like to quip that Nortel is in a “death spiral”.  The theory is that customers may be hesistant to buy Nortel at a time when its solvency 2-3 years down the road is questionable.  Understandably this makes them wary.  After all, they want to be sure that product support, often as important as the product itself, will be available in the future.  They want insurance behind their purchase.  For this reason the competitors’ sales teams are likely exploiting this reason to gain market share, causing Nortel to lose more customers.

The loss of customers causes a further decline in revenue, thus hastening the slide towards bankruptcy.  And so the cycle continues.  

This is analysis has been so widely reported that it need no further discussion here.  But one thing that’s worth pointing out is how this “death spiral” is affecting workers.

Just the other day we became aware of an employee who said that two people were laid off from their group. With the current hiring freeze (and freeze on most other spending) there are simply no resources available to replace them, onsite, offsite, onshore or offshore.  The remaining members will just have to “pick up the slack.” Of course, this isn’t really possible, so their deadlines will slip, or product quality will suffer, further deteriorating the brand name and reputation of Nortel.

But what’s to be done? There is no easy answer, of course.  It may be that the bad management decisions of yesteryear are coming back to haunt the executives one last time.  And it may be that under the current conditions recovery is hard to unlikely.  But one thing that is for certain is that this situation is placing much more undue stress on workers who have been living in fear for many years.  Some will continue to handle it, though some will eventually crack and seek employment elsewhere.  This will further contribute to the “death spiral.”

After the most recent quarterly earnings release, Nortel released a FAQ to its employees.  One of the questions was, “What is the attrition rate of employees at Nortel?” In the answer, Nortel refused to disclose the exact numbers (as is expected since this would be valuable information to competitors/recruiters) but merely said that the Nortel employee base was “extremely loyal.”

While it is true that many be loyal, their patience is certainly being tested beyond what would be considered loyalty.  (The entire topic of loyalty deserves its own article)

While layoffs are generally a bad thing, the view amongst coworkers we’re familiar with is that there were not enough layoffs this time around.  Remember, this is coming from an environment where 60,000+ have lost their jobs in the past 8 years or so.  Why is this?

For one thing many believe drastic restructuring is necessary for survival.  Others just want a severance package.  Either way, though it may be odd that employees themselves want more layoffs, when one analyzes the situation it becomes clear that this may actually benefit the employees more.

Of course there are negatives.  No one likes to move and change jobs and many have families.  Moving is never easy especially if there are young ones to take care of.  

So why did Nortel not layoff more employees? The simple and scary answer may be that there isn’t enough money left for mass layoffs.