OTTAWA (Reuters)—Nortel Networks Corp., one of the world’s biggest telecommunications equipment suppliers, said on Thursday it will unveil a $1.9 billion spending plan for research and development next week.
“We have teams working on where and how we’re going to be investing the $1.9 billion. We’ll be announcing it next week,” chief executive Mike Zafirovski told a conference in Whistler, British Columbia.
“We have thrown a challenge, for us to have a 20 points of market share minimum in anything in which we participate today. And if not, obviously to be looking for some alternatives.”
Zafirovski, who marks 100 days in the CEO post on Friday, said the company will consider reinvesting its R&D budget in areas where it has a better chance to dominate.
“This is intended to be a growth story and will be a growth story. So though we may be exiting some activities … we will be reinvesting in places we’re going to win,” Zafirovski told the media and technology conference on a Webcast.
“It’s a combination of business transformation and realigning our investments to have this be an organization that has profitable growth as a key expectation.”
Calling 2006 a transformation year, Zafirovski said the company is at “ground zero.” Since 1999, Nortel has been stung by layoffs that cut about two-thirds of its staff, financial restatements, lawsuits, and regulatory and criminal probes.
“We have 10 layers in the organization, which is crazy. We’re going down to six,” he said.
Zafirovski has been shaking up operations since his appointment November 15. The former Motorola and General Electric boss has named several new senior executives and reshaped operations.
Nortel is buying router maker Tasman Networks for $99.5 million, has struck a joint venture with Chinese rival Huawei Technologies for high-speed access products, and has sold its blade-server switch unit.