Nortel Israel today summoned for hearings 45 employees ahead of laying them off. The layoffs are due to the crisis at Nortel Networks Corporation (NYSE; TSX: NT) and the slump in demand for its products in view of uncertainty over the company's continued existence, and if so, in what form.
Until a few years ago, Nortel Israel was a leading supplier of telecommunications systems in Israel.
Nortel Networks, which is now operating under Chapter 11 bankruptcy protection, has slashed its workforce in a recovery effort, and its Israeli subsidiary is included in the measure. Nortel Israel is also operating under a stay in proceedings, and any material decision requires approval of the court.
Nortel Israel said in response, "Nortel is undergoing a comprehensive restructuring in order to rehabilitate the company and its position at the expiry of its bankruptcy protection proceedings as a focused and competitive company. Nortel is currently reducing its workforce in a controlled manner in accordance with its business activity and resources, in order to ensure the continued full support of its customers."
In February, the Tel Aviv District Court has issued an ex parte stay in proceedings for Nortel Communications Holdings (1997) Ltd. and Nortel Networks Israel (Sales and Marketing) Ltd. over their NIS 175 million debt, which is mainly owed to other Nortel Networks companies. The stay in proceedings is valid through March 23.
Published by Globes [online], Israel business news - www.globes-online.com - on March 3, 2009
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