Nortel to shed shareholders meeting, more employees

Nortel recently revealed plans to cancel its annual shareholders meeting, requested an extension to its bankruptcy protection, and indicated that more layoffs are on the way, in addition to other cost-cutting measures.

Ernst & Young, the court-appointed monitor of Nortel in the proceedings, issued a report that asks for an extension to the bankruptcy protection, through May 1. The initial 30-day stay period expires Feb. 13. Given the billions of dollars of debt and the complex and international restructuring that has to happen, that's certainly understandable.

Through the report, Nortel gives a glimpse into what it has in mind for its restructuring plan to reduce costs, but without specifics yet. The report says initiatives include "a detailed plan for a reduction of its global workforce," so we know even more layoffs are in store, despite the workforce reductions Nortel has already undergone in recent years. Nortel also indicated it is reviewing its real estate and other property leases, its IT equipment leases and contracts, supplier contracts, and discretionary spending.

Some moves were already apparent. Network World's Jim Duffy reported recently that Nortel was reconsidering its decision to sell the Metro Ethernet Networks division. And the company also backed out of a deal with WiMAX specialist Alvarion.

Another tidbit tucked into the Ernst & Young report was a request from Nortel to get out of its annual shareholders meeting. Perhaps executives aren't too fond of the taste of rotten tomatoes.

As the report put it, "the annual meeting would be a distraction to both management and other company resources at a time when they are required to be focused on stabilizing and restructuring the business for the benefit of all stakeholders." Nortel also brought up the costs associated with holding such a meeting, such as… postage.

I'm sticking to the tomatoes theory.

Jeff Caruso is site editor at Network World.