Just three months after joining the company, Nortel's president and chief operating officer, Gary Daichendt, and CTO Gary Kunis, have resigned, putting a big question mark over the company's future.
Nortel announced the news late on Friday. A statement from CEO Bill Owens revealed all was not well. "It has become apparent to Gary and me that we have divergent management styles and our business views differ," Owens said.
Nortel hired Daichendt, previously vice president of worldwide operations at Cisco, in March. Gary Kunis, who had been Cisco's chief science officer and worked alongside Daichendt, followed his colleague out the door.
Their hiring was considered a coup and part of a wider move to give enterprise networking more prominence within the company. Nortel has been increasingly relying on its enterprise network operations for revenue and also needed to put behind it an accounting scandal that forced the restatement of years of results.
Owens will now take back the reins he handed to Daichendt when he hired him. But analysts say Owens best not hold them too long or too tight.
"It's a blow to their enterprise play," said analyst Zeus Kerravala of The Yankee Group. "In a sense they're starting back at square one. The fact that it happened this quickly makes you wonder about the culture there.
Nikos Theodosopoulos of UBS Warburg asked: "Why were these guys hired in the first place? It's definitely a setback. The company just made an acquisition [of government integrator PEC Solutions] and you've got to deal now with integration of that. And now you have no COO. It puts some strain on the integration process of PEC."