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Nortel Gears Toward Leaner Focus
June 11, 2004
By Colin C. Haley
Tightening its focus and its belt, Nortel Networks (Quote) is
transferring part of its Directory and Operator Services (DOS) business to
VoltDelta for a minority ownership in that company.
About 160 employees in North America and Mexico will be offered jobs at
VoltDelta when the deal closes in the third quarter. Nortel will retain its
Traffic Operator Position System (TOPS) business, which is based primarily in
Research Triangle Park, N.C.
DOS consists of processing software and databases that enable carriers to
deploy directory assistance and operator services for their subscribers,
Nortel spokeswoman Tina Warren said.
Brampton, Ontario-based Nortel said the move will "accelerate development,
work more efficiently and increase interoperability between the products in
our customers' networks."
VoltDelta, a subsidiary of Volt Information Sciences (Quote), said
the addition of Nortel employees and technology will help it develop new
directory assistance services, particularly for the wireless market.
During the last five years, Nortel, along with its sector mates, have worked
on paring workforces and ancillary product lines and business units.
In particular, Nortel has focused on outsourcing. In January, the company
began negotiating
a long-term pact with Singapore-based contract manufacturer Flextronics
(Quote). The move could save Nortel $2 billion annually.
Despite the fact that the companies have not signed an agreement, Nortel's Warren said
talks with Flextronics, which also handles products for Lucent , Alcatel (Quote) and Motorola
Specifically, Nortel said it plans to sell its remaining factories and
facilities in Calgary, Montreal, Brazil, Northern Ireland and France so it
can focus on developing new technologies. About 2,500 jobs would be
transferred to Flextronics if the companies can strike a deal.
The strategy of cutting costs and narrowing its focus are key as Nortel
tries to regain its footing in the wake of an accounting
investigation that swept out its CEO.
Bill Owens, the company's new leader, recently said surging demand for
converged network equipment will help his company grow
faster than the industry average.
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