Nortel CEO Mike Zafirovski announces sudden departure

Nortel Networks president Mike Zafirovski speaks to media after appearing at Commons Finance committee hearing witnesses on stability of the financial system on Parliament Hill in Ottawa on Thursday, June 18, 2009. (Sean Kilpatrick / THE CANADIAN PRESS)

Four years after promising to turn Nortel Networks around, president and CEO Mike Zafirovski is stepping down.

Zafirovski, 55, announced his sudden departure on Monday as the cash-strapped company continues to sell off its assets while under bankruptcy protection.

CTV Ottawa has learned Zafirovski won't be getting a pension or severance pay.

As of fiscal 2008, Zafirovski was paid $1.2 million in total compensation. He also has millions of dollars in stock options; however, he's admitted those are now worthless.

Although he is part of the employee-wide annual incentive plan, there is no confirmation on how much money he will take away.

Zafirovski said in a release on Monday that he believes the company is stabilizing its business as it deals with its finances.

"The direction has been set and we are now at a natural transition point as we continue to service customers, maximize value through sales and continue restructuring activities," he said.

Nortel's board is also being reduced to three members from nine. John Manley is among those who have resigned.

In a separate announcement the company said second-quarter revenue fell by 25 per cent from the same time last year. Nortel's loss more than doubled, to US$274 million.

In Ottawa, 1,300 employees have either been let go or have left on their own regard since the company went into bankruptcy protection in January.

The company's current employment in the capital now sits at about 3,300 workers; down from 4,600 employees at the beginning of the year.

With files from The Canadian Press