Nortel staff learning fate

Over the last two weeks Nortel staff have been learning whether they have a future with the company as the process of integrating the vendor into its new owner Avaya proceeds.

The fate of Australian employees has been uncertain since Avaya emerged as the winning bidder for the embattled Nortel enterprise business in August.

"From a staff point of view I obviously can't give numbers but the process of offering staff roles and getting them ready to move over to the new company has started," Rick Seeto, who was announced as the head of Nortel’s enterprise business in Australia and New Zealand in August, said. "That has been running for the last couple of weeks now. I think generally staff are excited by the fact it is moving and they can see what the future ahead will be. That is for those getting offers and for those not getting offers they at least know how to plan going forward."

Seeto would not expand on what percentage of staff would be given offers at the Avaya / Nortel entity and said the new leaders would be announced after the deal was closed.

At the time Avaya's winning bid was announced, Seeto said he planned to inform employees of their fate by mid-October. However, due to the process of integrating the two companies – which Seeto stressed is progressing as planned while the deal is still set for mid-December approval – announcements on the employees' future were delayed to mid-November.

The deal is expected to close later this year and is subject to court approvals in the US, Canada, France and Israel as well as regulatory approvals, other customary closing conditions and certain post-closing purchase price adjustments. Globally, the vendor has appointed Deloitte Touche Tohmatsu to prepare a plan to integrate the companies.

Nortel’s troubles were crystallised in January when it filed for Chapter 11 in US bankruptcy court and subsequently went through rounds of staff cuts and selling off business units. Since the announcement there have been 5000 global layoffs, including in Australia, reducing Nortel's work force by 16 per cent, from about 30,000 to 25,000. The company will not provide a figure for the number of staff it has in Australia.

At the start of 2008 the vendor had a work force of 473 staff according to its filings to the Australian Securities and Investment Commission. It is understood this figure has reduced significantly since the company hit trouble and the economic downturn started to bite.

In its most recent financial reporting, Nortel reported a net loss in the third quarter of 2009 of $508 million compared to net loss of $3.4 billion in the same period in 2008.

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