Nortel Preserves Patent Plan

Nortel Networks Ltd. is gearing up for a layoff, grounding its corporate jets, and keeping its patent incentive program alive during the company's restructuring, Light Reading has learned from a review of recent court papers.

Layoffs on tap
In its first report on Nortel's restructuring, the company's bankruptcy monitor, Ernst & Young International , said Nortel was working on "a detailed plan for a reduction of its global workforce," among other cash-conserving activities.

The court papers gave no specific layoff projections. Nortel, to date, hasn't spelled out any new layoff plans. The company's last round of job cuts came in November, when it culled 1,300 from its ranks. (See Nortel Culls 1,300 Jobs, Loses $3.4B.)

Grounded jets
The E&Y report also said that, about 10 days ago, Nortel "delivered lease repudiation notices" to the company that leased its two Challenger corporate jets. That cutback alone is estimated by E&Y to save Nortel $1 million a month. No word on the hovercraft.

Patent program saved
One spot of good news in the filing: Nortel is keeping its Patent Reward Program, where employees get incentives for each patent registered or research grant obtained. About 100 inventors employed by Nortel are still waiting for incentive payouts for about 160 awards, as of January 13, the filing notes. E&Y projects that Nortel will shell out around $750,000 for the incentive plan in 2009.

So you can get a year's worth of keeping patent gnomes happy for less than a month's worth of jet-related services? Not a bad deal at all.

Finally, the E&Y report said Nortel had a cash balance of about $2.4 billion, as of January 30. That contrasts with the $4.5 billion worth of long-term debt and pension liabilities Nortel was on the hook for when it filed for bankruptcy protection last month. (See Nortel Files for Bankruptcy Protection and The Decline & Fall of Nortel Networks.)

— Phil Harvey, Editor-in-Chief, Light Reading
DCITDave 12/5/2012 | 4:12:08 PM
re: Nortel Preserves Patent Plan Is the patent incentive plan seen as good news for employees? What's the mood there these days? C'mon Nortelers, let us hear from you.
randy007 12/5/2012 | 4:12:06 PM
re: Nortel Preserves Patent Plan It will be stupidity giving anybody a bonus. No body is indispensable. So if someone takes a job in this environment let them go with best wishes;-)
MMQoS 12/5/2012 | 4:12:06 PM
re: Nortel Preserves Patent Plan With all the terminations in the CTO org where the majority of the patent filing occurred, I'd doubt the the payout will be that large. I was awarded a patent on GPON in 2008 and did receive compensation. Too bad the product lines were never incentivized to productise all of the good ideas that we created as architects.
My $ 0.02 is that top Execs were not cognizant of the value of the ideas coming out of research. Mike Z was too busy trying to fit us all with a recycled GE black belt. Just today I filed my bankruptcy claim and feel bad for my friends who remain on the razor edge.
It was a great company.
bollocks187 12/5/2012 | 4:11:59 PM
re: Nortel Preserves Patent Plan News about patents is the death nail for any company.

Did not Telecordia and numerous other companies try and leverage patents before they disappeared. Hey whatever happened to Bellcore/Telcordia anyway.
jorjoshjoe03 12/5/2012 | 4:11:55 PM
re: Nortel Preserves Patent Plan www.telcordia.com - alive and well!!!
wellfleet 12/5/2012 | 4:11:52 PM
re: Nortel Preserves Patent Plan These videos about sum it up.

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