Nortel's Decline: A Timeline

Nortel Networks filed Jan. 14 for Chapter 11 bankruptcy protection in the U.S. and under the Companies' Creditors Arrangement Act (CCAA) in Canada, just days before it was expected to pony up a $107 million interest payment. The filing comes as Nortel attempts to recover from its worst quarter in years and one of the toughest periods in its history. Here, we look at some of the recent highs and lows of Nortel, which managed to slip from the top of the world into bankruptcy protection in less than a decade.

May 1, 2000

Roughly 118 years after spawning Nortel Networks as its in-house mechanical department, Bell Canada (BCE) distributes 94 percent of its Nortel Networks stake to shareholders. Nortel Networks is now a completely independent global company.

Jan. 18, 2001

Nortel posts fourth quarter results on par with Wall Street expectations. Nortel earned $825 million on revenue of $8.82 billion, compared to earnings for $697 million on revenue of $6.57 billion in the fourth quarter of 1999. Full year revenue hit $30.38 billion, up 42 percent from $21.29 billion in 1999. Nortel enjoys success, its employee count hits 93,500.

Feb.15, 2001

Despite projecting 30 percent growth in 2001, Nortel cuts its earnings and sales forecast in half, citing the weak U.S. economy. That warning is a catalyst for a 33-percent drop in Nortel's stock and triggers a number of class action lawsuits.

Oct. 2, 2001

Nortel Networks announces CFO Frank Dunn will replace John Roth as president and CEO. Nortel also announces adjusted earnings projections, adding that it would further restructure and reduce head count by another 20,000 in the quarter.

Oct. 18, 2001

Nortel posts a $3.5 billion loss in the third quarter.

Jan. 18, 2002

Nortel suffers another steep fourth quarter slide in sales, reporting fourth-quarter revenue from continuing operations of $3.46 billion, down 58 percent from $8.2 billion in the same period a year before. The company posted a loss of $1.83 billion, compared with a loss of $1.41 billion in the same quarter a year prior. The company says it expects to return to profitability in the fourth quarter of 2002.

Feb 11, 2002

Nortel Chief Financial Officer, Terry Hungle, resigns after buying and selling company stock within his retirement plan in violation of company policy.

May 29, 2002

Nortel announces plans to cut 3,500 jobs and says it may sell its optical-components business as it revamps its operations to save money.

June 4, 2002

Nortel shares drop to new lows on concerns a new financing will further dilute its stock.

Sept. 3, 2003

Nortel's employee numbers hit 35,500, a massive dip from the nearly 95,000 just two and a half years prior.

Oct. 23, 2003

Nortel announces plans to restate its earnings for 2000, 2001, 2002 and the first half of 2003, despite reporting a quarterly profit.

March 15, 2004

Nortel places its CFO Douglas Beatty and Controller Michael Gollogly on leave and unveils plans for additional restatements for 2003. The company also delays filing its annual report.

April 5, 2004

The SEC launches a formal investigation into Nortel's accounting irregularities.

April 28, 2004

Company Director William Owens takes over as president and CEO after predecessor Frank Dunn (pictured, courtesy of AFP Photo/Ho/Nortel Networks) is fired for cause.

June 29, 2004

Nortel exits the manufacturing business, sells plants to Flextronics International and transfers 2,500 employees.

Sept. 30, 2004

Nortel announces plans to cut nearly 10 percent of its staff, or 3,250 jobs, and vacates offices worldwide. The plan includes the reduction of about two million square feet of occupied real estate, to be completed by the end of 2005.

Jan. 11, 2005

Nortel completes its financial restatements and says a dozen executives will pay back nearly $9 million in bonuses.

Oct. 17, 2005

Nortel names Mike Zafirovski (pictured, courtesy of Nortel) as president and CEO. Zafirovski, who joins Nortel from Motorola, promises renewed growth and focus.

Feb. 8, 2006

Nortel faces class action lawsuits from its accounting scandal and agrees to pay $2.47 billion in settlements.

March 10, 2006

Nortel delays 2005 annual report, says restatements are necessary for 2003, 2004 and part of 2005.

April 28, 2006

Nortel files financial statements for 2005 and restated results.

June 27, 2006

Nortel outlines plans to cut about 1,100 global positions and revamp its North American pension plan to reduce expenses. Nortel expects the changes to slash $100 million in pension expenses annually starting in 2008, producing a savings of more than $400 million by 2012.

July 18, 2006

Nortel and Microsoft form the Innovative Communications Alliance, a partnership to deliver unified communications products. First products are expected to ship in the second quarter of 2007. Shown here are Zafirovski and Microsoft CEO Steve Ballmer celebrating the alliance.

Feb. 7, 2007

Nortel slashes more jobs. This time, 3,900 jobs are cut and 1,000 positions are transferred to lower-cost locations like China and India.

March 1, 2007

Nortel launches revamped channel program and says it plans to restate 2004, 2005 and 2006 results.

Oct. 15, 2007

Nortel pays $35 million to settle civil charges filed by the SEC related to its accounting scandal.

Feb. 27, 2008

Nortel announces plans to cut 2,100 more jobs as part of its 2008 restructuring plan, citing weakening demand for products. Nortel also plans to move 1,000 more positions to cheaper locations as it posts a loss in its fifth out of six quarters, slipping $844 million.

June 19, 2008

After a four-year investigation, Canadian authorities arrested ex-CEO Frank Dunn, ex-CFO Douglas Beatty and former corporate Controller Michael Gollogly on fraud charges for their alleged roles in the ongoing stock and accounting scandal. The Royal Canadian Mounted Police said the charges include "fraud affecting public market; falsification of books and documents; and false prospectus, pertaining to allegations of criminal activity within Nortel Networks during 2002 and 2003."

Sept. 17, 2008

Nortel cuts revenue forecast and plans another round of restructuring. The company also plans the sale of its Metro Ethernet Networks division, which the company said could bring in an additional $1 billion.

Nov. 10, 2008

Nortel posts its largest quarterly loss in seven years -- $3.4 billion. The mounting loses coupled with piles of debt forces Nortel to lay off 1,300 and freeze hiring and salary increases. The company also plans to review its real estate holdings. Additionally, Nortel announces that several of its top executives will vacate their posts in the new year, including CTO John Roese and Lauren Flaherty, chief marketing officer. Global Services President Dietmar Wendt and Bill Nelson, executive vice president of global sales (pictured, courtesy of Nortel) are also expected to leave Nortel come January 1.

Jan. 14, 2009

Nortel files for Chapter 11 bankruptcy protection in the U.S. and under the Companies' Creditors Arrangement Act in Canada, just days before it's set to pay a $107-million interest payment.

"Nortel must be put on a sound financial footing once and for all," Zafirovski (pictured, courtesy of Nortel) said in a statement announcing Nortel's filings. "These actions are imperative so that Nortel can build on its core strengths and become the highly focused and financially sound leader in the communications industry that its people, technology and customer relationships show it ought to be. I am confident that the actions we're announcing today will be the fastest, most effective means to translate our improved operational efficiency, double-digit productivity, focused R&D and technology leadership into long-term success."