Bankruptcy for Triangle employer?

December 9, 2008 9:00:00 PM PST
The Wall Street Journal reports that Nortel Networks is exploring a possible bankruptcy filing. The Technology firm employs about 2,000 people in Research Triangle Park.The company's stock fell about 29 percent Wednesday on the news.

A Nortel spokesperson told Eyewitness News that the company has no immediate plans to file for protection and is focused on cutting expenses wherever it can.

"Nortel is hard at work reshaping the business to even better serve our customers. There are those who fuel negative speculation, but there are many more who believe that Nortel has put in place the necessary plans to strengthen our financial footing and reset our cost base. Even just two weeks ago, Standard & Poor's reaffirmed our credit rating stating 'Nortel should be able to sustain adequate levels of liquidity in the next 12-18 months,'" said Jay Barta.

As of the end of September, published reports say Nortel's debt was over $6 billion. The corporation, which began as a phone company over a century ago, has struggled as customers have switched from its products to newer technology offered by Cisco Systems.

“Nortel is a viable partner for the long term. We have no debt maturity until 2011, and we are preserving and strengthening our cash position. On November 10th, we put in place an aggressive plan to bring down costs by $400million with a minimum level of cash outlay. The goals we laid out on November 10th have not changed. We remain focused on executing a significant shift to our operating model and cost base to reflect the economic environment that we are now in. Our commitment is to remain an innovation-driven organization -- delivering value to our customers for the long term,” said Barta.

Nortel says there are no specific plans for restructuring at the Research Triangle Park office, but does say the company plans to cut about 1,300 positions globally. Nortel has 2,200 positions in Raleigh and about 31,200 worldwide.

"RTP remains Nortel's third largest location in North America and an important campus for the company, housing key business activities including customer service and support, finance, IT, HR, sales and marketing, and research and development. RTP also plays an important role in Nortel's future as home to our North American Innovative Communications Alliance Collaboration Center with Microsoft, and the Nortel-IBM Joint Development Center. We have an extremely talented workforce in RTP who are playing big role in re-establishing Nortel as a profitable, competitive, high-performance company," said Barta.


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