One way to keep spirits up in the face of adversity to is to laugh at someone else. With pink slips and DCMs (don't come Monday) flying in the network hardware space at the moment, the good folk at Lucent Technologies decided it was a good time to ignore their own vulnerability and poke fun at rival Nortel.
Apparently some wag circulated this "press release" in one of Lucent's US offices and, with the wonders of e-mail, it was soon doing the rounds of every "Little Bell" office in the world. Tabloid reproduces the e-mail here for your edification:
NEW YORK - Nortel Networks will reduce its workforce by an unprecedented 120 per cent by the end of 2001. It is believed to be the first time a major corporation has laid off more employees than it actually has. Nortel stock soared more than 12 points following the news.
The reduction decision, which was announced last week, came after a year-long internal review of cost-cutting procedures concluded the company would save $1.2 billion by eliminating 20 per cent of its 88,000 employees.
From there, Nortel Networks chairman and CEO John Roth said: "It didn't take a genius to figure out that if we cut 40 per cent of our workforce, we'd save $2.4 billion, and if we cut 100 per cent of our workforce, we'd save $6 billion.
"But then we thought, why stop there? Let's cut another 20 per cent and save $7 billion. We believe in increasing shareholder value. We also believe that by decreasing expenditures, we enhance our competitive cost position and our bottom line," he added.
Nortel Networks plans to achieve the 100 per cent internal reduction through layoffs, attrition and early retirement packages. To achieve the 20 per cent in external reductions, the vendor giant plans to involuntarily downsize 18,000 non-Nortel employees who presently work for other companies.
"We pretty much picked them out of a hat," said Roth. Among firms Nortel has picked as "External Reduction Targets," or ERTs, are Quaker Oats, AMR Corporation (parent of American Airlines), Lockheed, Boeing and Charles Schwab & Co.
Nortel's plan presents a
"win-win" for the company and ERTs, said Roth. Any savings by ERTs would be passed on to Nortel, while the ERTs themselves would benefit by the increase in stock price that usually accompanies personnel cutback announcements.
"We're also hoping that since, over the years, we've been really helpful to a lot of companies, they'll do this for us, kind of as a favour," said Roth.
Legally, pink slips sent out by Nortel would have no standing for ERTs unless those companies agreed. While executives at ERTs declined to comment, employees at those companies said they were not inclined to cooperate.
"This is ridiculous. I don't work for Nortel. They can't fire me," said Kaili Blackburn, a flight attendant with American Airlines. Reactions like that "are not very sporting", Nortel's Roth said.