Nortel staff and customers to keep on waiting on fate of jobs and product roadmap

Integration with Avaya going ahead as planned, but product roadmap can't be released until after merger approval and staff won't know extent of job cuts until mid-November

Nortel employees won't find out their fate until mid-November and the vendor's customers will have to wait until at least the end of the year before they can see a new product roadmap, according to the company's Australian chief.

In August, Avaya emerged as the winning bidder for the embattled Nortel enterprise business, reportedly beating out Siemens Enterprise Communications in a bidding process, to pay $US900 million for the unit.

The sale, expected to close later this year, 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.

In September it was announced that Nortel enterprise customers will be able to buy the company's current line of products for 12 to 18 months after Avaya officially takes ownership of Nortel's enterprise division. After that period, Avaya said it will have a migration path laid out that customers can follow to bring themselves into Avaya's official product line. However, customers won't be able to see an official roadmap till closer to the end of the year.

"On the portfolio side the thinking and action is around how [to] take best-of-breed out of the two companies and put them together in an integrated portfolio. Then... show what the [evolutionary] step is next time around to bring those customers together," Rick Seeto, who was announced as the head of Nortel’s enterprise business in Australia and New Zealand in August, said.

"The official roadmap can't be released until after the deal is closed. Everyone is still focused on trying to get the deal closed in mid to late December at the latest. That is the target date they are aiming for.

"We are going to be continuing to ship existing products for another 12 to 18 months and then, obviously, the standard support arrangements will continue for those products so we can maximise the lifecycle for those customers."

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 has been delayed to mid-November.

"It is more to do in the volume of the work than any hiccup in the process itself," Seeto said. "Particularly, and I am only commenting on my own patch here in A/NZ, that process of understanding what people we have in our organisation, potentially how many people will go, or more importantly, what roles need to go across [to Avaya]; those discussions are reaching maturity as per the plan. The notification to employees though is probably going to be delayed a little bit purely because of the sheer volume of work the integration team is trying to get through."

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.

"The integration is on track. My focus continues to be on our people. Everybody feels some instability and my goal is to try and alleviate that as much as possible. But, obviously, people are nervous and they need to know: a), if they are going to have a job, and b), what that job is," Seeto said. "We are doing all we can to alleviate some of that stress and keep our good people with us as we move over."

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