Nortel's business units will need their increased speed

As I mentioned last time, Nortel's latest restructuring may be a sign that the company is getting ready to break apart. But is it too late?

CTO John Roese, one of the unfortunate 1,300 to be eliminated from the company in this week's restructuring, wrote a blog post about the decision to give the business units more autonomy, a post that interestingly is featured quite prominently on Nortel's home page at the time of this writing. He didn't mention any plans to split the company up, but instead focused on the speed benefits of the new structure:

"By having discrete business units and eliminating a complex matrix organization that we have historically operated within, the individual BU's can make quicker decisions, optimize their processes and structures, make strategic partnerships, and adjust technology and market strategy far faster than before… As Nortel transforms into this BU formation, we will be a company that has discrete and fully integrated focus on the enterprise evolved market and the next-generation carrier market. Each of those BU's will be lean, focused and autonomous and with that posture will have an increased capability to make rapid decisions and execute in their markets."

Well, not "we," John, but we know it can be hard to let go.

Ehud Gelblum, managing director and senior equity research analyst at JP Morgan Securities, said in a report this week that pushing all of the marketing, technology, sales and services functions back into the business units is a good move and is "where they belonged all along."

But he was also keen on this idea that Nortel could be split up more easily under the new structure, with "autonomous pieces that could be sold off or merged into other entities individually if the need arises down the road."

Gelblum also said in his report that the restructuring efforts don't go far enough, that it may be too little, too late, and that the company may be running out of time - and money. If Nortel doesn't act faster, it could find itself in hot water.

Of course, if the restructured business units achieve the speed benefits that Roese alluded to, acting faster shouldn't be a problem, right?

Jeff Caruso is site editor at Network World.