Nortel Insider – by Desk Jockey

Dear Mr. Zafirovski,

The past ~36 months have been a roller coaster ride for us, the employees of Nortel.  Even with the consideration of the dot-com boom and bust, never have things been more volatile and uncertain for us.  While the past ten years have borne witness to an unparallelled rise and fall in the successes of Nortel, your term of leadership has served as a microcosm of the overall situation.

This is strange, because you were brought in on a platform of change.  Change from the old ways, a change from corruption and cronyism, and above all, a commitment to turning the company around and setting things right. 

We were very optimistic and hopeful and we trusted you; perhaps because we needed someone to trust after so many years of neglect.  In a way, you were to be Nortel’s savior, a part that you did not shy away from.

We believed in you as well.  When you created Ethics and Integrity courses that all employees were required to take, some initially sneered at the idea, but we thought if anything, it showed a real commitment to your word.  When you announced the creation of Lean Six Sigma programs, USDRP and other top-down initiatives, some of which we disagreed with, we went along with them because we believed it was for the best.

But soon, actions from your management began to tell a different story.  Firstly, there was the replacement of many long time and loyal executives with hand picked former GE managers.  Okay, we thought. Maybe this will be for the better, since Mr. Zafirovski has already vetted these people and has a good working relationship with them. This was how we explained your actions to ourselves.  

But then, in the midst of all the Ethics and Integrity promotion, a single incident occurred that caused many to lose faith in your leadership.  When Joel Hackney assaulted a female university student and refused to answer questions, instead directing media questions to Nortel’s PR department, you had a chance to prove your worth.  You had a chance to stick to your word.  You had a chance to keep us believing. 

Instead, however, you chose to help out your friend.  We cannot rightly judge you for this, as we understand the bonds of friendship can be quite strong and lasting.  However, as a corporate officer, you have responsibilities that sometimes come into conflict with friendships, even good ones.  As the President and CEO of Nortel, it is your duty to act in the best interests of Nortel, even if this requires losing a friendship of many years.  Yes, we understand it would have been a hard decision – but that is why the job of a CEO is as it should be: tough.

Despite this, we kept on going.  We kept up the faith and kept hoping for the best.  We watched as the stock price eroded along with shareholder confidence.  When we asked why this was happening, we did not get an adequate response, as the problem was almost always dismissed as being the result of “media bias”.  

We stuck through it all, even after more rounds of layoffs well into the “3-5 year plan” to turn Nortel around.  We accepted your explanations that these workforce reductions were part of a necessary restructuring plan, even as we watched our dear friends go.  We continued to believe that things would turn around.

Even after the most recent revised earnings release last September, we continued to hope that you and your team would be able to repair the damage and keep the ship afloat.  It greatly saddens us to say that our trust was misplaced, as this became readily apparent after the disastrous Q3 2008 earnings release.  We wanted you to be straightforward with us, but unfortunately that did not turn out to be the case.  We were beginning to lose our trust.

Even after it was revealed that you had been seeking bankruptcy protection for the company, you and your PR team continued to deny this fact.  You continued to tell us that things were better than they sounded and that the media was contributing and adding to all the negative news.  You told us not to worry and to instead to keep working hard, no matter what bad news we heard.  Many of us were skeptical, but kept on working because we had years invested in this company and were not about to quit and lose it.

However, Mr. Zafirovski, the past week has pushed us beyond the normal human capacity for blind trust.  After Nortel declared bankruptcy, it became utterly clear that you had set out to deceive us from the very start.  Many were working because they wanted control of their future.  You have taken that all away from us by ruthlessly removing all severance payments that the employees rightfully deserve.  The employees who have been the most loyal to the company stand to suffer the most from your actions, and in addition, their pensions have been compromised.

How will you explain this to them, as you move to rapidly downside the workforce now that you have no obligations to it anymore? How will you explain that your previous words thanking the employees have meant nothing, and were nothing more than a show to trick us into following you? And, most importantly, how to expect to turn Nortel around with this sort of behavior?

While the media opines about the great rise and fall of Nortel, the real story, the untold story about the financial, mental and emotional suffering that many Nortel families will undoubtedly have to endure, goes unheard.  I am told that you are a family man, Mr. Zafirovski.  I do not doubt it either, considering your frequent jaunts back home to Chicago using the company-provided private jet.  Being a family man, you will no doubt understand the pain of not being able to provide for your family.  Tell me, Mr. Zafirovski, what should the employees of Nortel tell their families?   How should they prepare to receive the news that their financial future is in ruin?  What will you tell those whose livelihoods have been destroyed?

Mr. Zafirovski, you have betrayed us.  You have betrayed the shareholders, customers, but above all, you have betrayed us, the loyal employees of Nortel who stuck through thick and thin because we loved this company.  And this company is made of people, its workforce and does not consist solely of a CEO and his management team.  As an employee, and perhaps the most important employee of Nortel, you had a responsibility to drive the company towards success, not only for your own benefit, but for the safety and security of its other employees as well.  You have failed us.

Right now, we just want the truth.  We want honesty from your management team for once.  We want you to be straightforward with us, even if the truth hurts.  We have been through enough of the pain from lies already, and we can take no more of it.  We want to know how you will personally deal with this bankruptcy.  Will you continue to bestow unwarranted bonuses and large salaries upon the executives and yourself as part of a “Key Employee Incentive Program” (KEIP)  even as the bankruptcy proceeds? Or will you forgo these lavish excesses to show at least some solidarity with the rank-and-file? And exactly how many employees will be let go, and should they have any hope of recouping any of their severance?

Above all, Mr. Zavirovski, we just want something that we can believe in, once and for all.

Sincerely,

Desk Jockey