TORONTO — Nortel Networks Corp. spent years ringing up multiple rounds of layoffs as it tried to fix big problems in its business. But it couldn't ward off the recession.
The telecommunications equipment maker filed for bankruptcy protection in Canada and the U.S. on Wednesday, becoming the first major technology company to take that step in this global downturn. The filing came a day before Nortel was due to make a debt payment of $107 million.
Facing a sharp drop in orders from phone companies, Nortel used the bankruptcy filings to buy time to explore restructuring options like selling off assets. Some help already is coming from the Canadian government.
The Toronto-based company said in a release that it had been in the process of a turnaround since late 2005, but "the global financial crisis and recession have compounded Nortel's financial challenges and directly impacted its ability to complete this transformation."