Nortel Networks Corp. is asking both U.S. and Canadian courts to approve a new employee retention plan designed to keep some key staff from quitting their jobs as various business units are sold off, the insolvent company said Thursday.
The former star Canadian telecom equipment vendor said buyers for its various business divisions have made it clear they want Nortel to hang onto employees to ensure a smooth transition.
The jobs range from the company's finance department to supply chain management, research and development, and human resources, Nortel said in a statement.
Nortel said its latest employee retention plan was created with the help of independent advisers who factored in the possibility that more stable and competitive jobs could lure staff away.
The company, however, did not disclose how much money it hoped to set aside for the retention program.
About 88 per cent of the costs for Nortel's retention plan would be funded by the companies that buy Nortel's businesses, a stipulation made in the sales agreements.
"The employees being offered participation in the plan were instrumental in the work completed to date and are critical to fulfilling the remaining tasks," said Nortel chairman David Richardson in a release.
"The loss of these key employees at this time would create significant delays in our activities and place the achievement of our objectives at risk. In short, we believe the plan is in the best interests of our creditors and other stakeholders, and of the process itself."
Nortel says it has received net proceeds of $2-billion (U.S.) from the completed sales of its assets, while another $1-billion is expected once several previously announced sales are completed.
The company has already sold several of its biggest business units to a variety of buyers in a series of competitive auctions and is working to complete sales of other units or assets.
Nortel has been operating under court protection from creditors since January, 2009.
Last March, Nortel received court approval to include eight senior executives in a $45-million incentive program that would reward them for achieving certain goals.
The program was split into two parts, with about $22-million set aside to keep about 900 key engineers and other professionals with the company. The other $23-million, provided goals-oriented incentives for 84 people, including the eight members of the senior management team.