"Sounds like they are preparing for a sale, not saving costs,” says the pullquoted analyst in the Wall Street Journal today. Nortel's 1,300 layoffs, at 18 percent of headcount, would seem pro forma if they didn't include CTO John Roese, whose blog documented the company's efforts to turn itself around. Roese typed up "My Final Blog Post" yesterday. As a going-away present, I've 100-worded his weepy-but-brave essay. His point becomes much more obvious:
RBC Capital is a Canadian bank whose research analysts are still on the job, unlike half of Wall Street's. Too bad they're not able to crunch some happier numbers: RBC downgraded Alcatel-Lucent, Nortel, Garmin, Symmetricom, DSP Group and Ericsson this morning. Thirty-word version from analyst Mark Sue:
Nortel, the second-rung maker of telecom equipment, is losing money. In an attempt to stop doing that, the company is firing 3,100 workers. Of course, that's not how Nortel PR is spinning it. The AP reports: "The company said it plans to cut about 2,100 jobs globally and will shift approximately 1,000 additional jobs to lower-cost areas." Even with our mere powers of journalist math, we can calculate that the company is really firing 3,100 employees and hiring 1,000 more for lower pay — a likely euphemism for "shifting jobs overseas."
Internet telephone provider Vonage has reached a settlement in its patent dispute with Nortel. Vonage won't pay for past damages, and both companies have agreed to a cross-licensing deal instead. The settlement ends the last of the company's pending legal battles with major telecom carriers and equipment makers. If the Internet telephone company has truly put its legal problems in its past — not a forgone conclusion — the company may now move on to address problems. Problems like providing reliable service at a profit. Oh yes, that. [Reuters]
Vonage isn't just facing service issues today. It's also been revealed that Nortel countersued the Internet telephone provider over a patent dispute. That makes four big telephone companies suing Vonage for patent infringement: AT&T, Sprint Nextel, Verizon, and now Nortel. The good news: At this rate, Vonage is running out of companies to get sued by. [News.com]
3Com has agreed to be acquired by Bain Capital for about $2.2 billion in cash — a 44 percent premium over Thursday's closing price. Included in the deal is a minority stake in 3Com for Chinese network giant Huawei Technologies, which is getting control of H3C, the companies' joint venture. By shutting out Nortel, which also was interested in 3Com, Huawei prevents its Canadian rival from getting a foothold in its rapidly expanding home market. [WSJ]