It was just a matter of time, and Nortel Networks says the time is right for CEO and President Mike Zafirovski to step down.
Both Zafirovski, a former Motorola executive, and the board believe the company has reached “a natural transition point,” the company said. The departure is effective today.
The board also is being reduced from nine members to three.
Zafirovski left Motorola in early 2005, and Motorola challenged his appointment at Nortel, claiming it would result in trade secrets being shared. But the two companies eventually reached a settlement.
Nortel filed for bankruptcy protection this past January.
Zafirovski came to Nortel to transform the company, and while he made progress on many fronts, the economic downturn and the company’s legacy cost structure derailed his efforts, according to a statement by board Chairman Harry Pearce.
Nortel has an agreement with Ericsson for the $1.13 billion sale of its CDMA/LTE access business, but the auction process leading up to the sale has come under fire. Government officials held an emergency meeting on Friday to hear from key players in the process.
As part of his statement today, Zafirovski noted the deal with Ericsson includes preserving 80 percent of the jobs associated with that business.
Separately, Nortel reported second-quarter revenues of $1.97 billion, which represented a 14 percent increase over the first quarter and a decrease of 25 percent compared with the year-ago quarter. The company’s net loss for the second quarter was $274 million.