Nortel Shuffle Gets Under Way

While at Motorola (MOT Quote), Zafirovski was credited with making sharp cost cuts and unambiguous decisions to shutdown laggard portions of the business.

Upon his arrival at Nortel, Zafirovski laid out a few goals for the company, including the expansion of operating margins into the range of 14% to 18%. Investors have since questioned how Nortel could pull off the huge leap from the 2% margin the company currently captures.

UBS analyst Theodosopoulos says the company would need to narrow its focus on a few strong product lines to achieve those profit levels.

Nortel shares were down 3 cents to $2.81 and rival Lucent (LU Quote) fell 2 cents to $2.80 in midday trading Wednesday.