Nortel Preserves Patent Plan
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.)
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