Telecoms equipment maker Nortel has announced its president and chief executive Mike Zafirovski is stepping down from today with the board of directors reduced from nine to three members, as the process of breaking up the company continues.
It was widely reported at the weekend that Zafirovski was on the verge of moving on, as the firm continues to sell off the remaining parts of its business.
Nortel last month agreed a $1.13bn (£686m) deal to sell its LTE and CDMA assets to wireless telephone network provider Ericsson, and just last week its request to sell off its enterprise business was granted by the US and Canadian courts.
Zafirovski joined the company in 2005 with a good track record of turning around the fortunes of struggling companies, such as Motorola's mobile phone division, however he could not prevent Nortel from slipping into bankruptcy in January.
Harry Pearce, chairman of the board, blamed the "deteriorating economic climate and the company's legacy cost structure" for Zafirovski's failure at the firm.
"We've reached a logical departure point," he added.
"Mike made a commitment to see the process through the stabilisation of the company, sale of its largest assets and the right plans and people to continue operating our business and serving customers. He has done so."
Ironically, the Toronto-based company released good Q2 results today, which showed revenues, margins and cash up over the previous quarter.
"Since filing for creditor protection, the company has been successfully stabilising its businesses and maintaining customer commitments and innovation platforms. Results for the second quarter demonstrate solid financial performance over the first quarter, while customer metrics remain strong," said Zafirovski.
"I am extremely proud to have been associated with this company. Although solid progress was made in many areas, at the end, the capital structure and legacy costs coupled with the economic downturn proved too difficult to surmount."
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