The number 2 executive at the telecom equipment supplier suddenly resigns after only 12 weeks on the job.
Gary Daichendt became former president and COO of Nortel today, stepping down amid a clash of views with company CEO Bill Owens. Chief technology officer Gary Kunis also tendered his resignation.
Investors responded Friday by dumping Nortel shares in heavy trading. Intraday prices of Nortel stock were down 23 cents to $2.58 per share.
Mr. Daichendt and Mr. Kunis worked together at Cisco, and joined Nortel at the same time. There were no public signs of problems between the men and the CEO. Analysts were not encouraged by the news.
Charter Equity analyst Ed Snyder said in a note that the executives’ departure “reinforces our view that the company is still struggling with management problems that will increase uncertainty inside the firm and lead to lower productivity and declining operating performance this year.”
Nortel just finished its first quarter where its results were up to date with its financial statements. The company still faces an assortment of regulatory probes and shareholder actions related to several years of accounting problems.
One school of thought suggests the two departed executives, brought on to help boost Nortel sales, presented a plan of action that Mr. Owens and the board simply could not bring themselves to implement.
As both Mr. Daichendt and Mr. Kunis were well-regarded for their work with Cisco, it is expected they will emerge in new positions in the industry soon.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
