“It is always difficult to see colleagues go, but we made the necessary decision to consolidate our executive layer and reshape Nortel."

RESEARCH TRIANGLE PARK, N.C. The more than 32,000 people who work for shrunken telecom giant Nortel, its investors who have seen share value plunge from $20 to pennies in a year, and analysts following the firm awoke Monday expecting a financial tsunami of an announcement.

What they got as Nortel announced a $3 billion red-ink bath for the third quarter was only a series of announcements that might slosh water out of a nearly full bathtub.

Did a reorganization plan accompanied by some job trims and the booting of some top executives save the S.S. Nortel, or did management just reshuffle deckchairs on what many analysts are growing to believe is a business Titanic?

The news for workers (including some 2,000 in the Triangle) was a lot better than expected – 1,200 jobs gone, a continued hiring freeze, a wage freeze and the shifting of some 200 positions to lower-cost operations. Some forecasts had said Nortel (NYSE: NT) would cut at least 10 percent of its work force, perhaps even 15 percent.

Perhaps the biggest change came in the ranks of senior management, where Chief Executive Officer Mike Zafirovski gave the heave-ho to four top managers, “flattened” (to use Nortel’s language) its management structure and said two other executives would be retiring. Bear in mind this key fact – In three years on the job of trying to rebuild Nortel, Zafirovski completely reshaped Nortel’s management team in his image – and his structure.

“It is always difficult to see colleagues go, but we made the necessary decision to consolidate our executive layer and reshape Nortel,” Mike Z., as he’s called, said in a statement.

Chief Marketing Officer Lauren Flaherty, Chief Technology Officer John Roese, Global Services President Dietmar Wendt and Executive Vice President Global Sales Bill Nelson are out as of Jan. 1.

Meanwhile, Joel Hackney, once Nortel’s top exec in RTP, is being handed more responsibility as part of the management restructuring.

However, Nortel said there had been no change in the status of its Metro Ethernet business unit, which has been for sale since mid-September. Is a reorganization and slight trimming of work force enough to save the company?

Mike Z. had a conference call later Monday morning before the markets opened. It will be interesting to see how Wall Street reacts to his latest moves.

As for the vast majority of Nortel workers, the Monday morning massacre didn’t occur. Nonetheless, they probably had the life jackets – and updated resumes – handy.