Nortel released its year-end numbers Wednesday, giving observers a glimpse into the company's bleak fiscal situation, in which it posted a loss of just under US$6 billion in 2008.

Nortel lost more than US$2 billion in the fourth quarter, pulled down by heavy asset writeoffs and a 15 per cent slump in sales for the penny-stock telecommunications equipment maker, which was once Canada's most extravagantly valued company.

Looking for a bright side, chief executive Mike Zafirovski said Monday that Nortel's operating profit margin, as adjusted and tracked by management, was its best since the technology bubble imploded, with fourth-quarter operating costs down 30 per cent from a year earlier.

Zafirovski said the company is meeting its targets, adding that "strong operating performance focused on customers, costs and cash resulted in meeting or exceeding guidance for management operating margin and cash."

However, critics -- many who are inside the company -- say Nortel is simply going in the wrong direction.

This week, a court will rule on a plan to pay up to $45 million in bonuses for nearly 1,000 employees. If the plan is approved, Zafirovski will not be one of those to benefit from a bonus.

However, the plan would benefit nearly 100 senior managers and nearly 900 other key employees scattered though various levels of the firm.

In court documents, Nortel argues that companies trying to restructure under bankruptcy protection frequently offer similar types of rewards.

Nortel says it can't afford to lose their top employees, during what is described a "fragile time."

The company is currently grappling with three targets: cutting staff; re-focusing the company; and getting a business plan approved by creditors, which would allow Nortel to come out of bankruptcy protection. Bonuses would be paid as each target is met.

Documents also point out that Canadian law allows for a simple bonus to be paid without any targets being met, just to keep key people with the company. However, Nortel management decided to pass on such payments.

All of this continues to be a tough education for rank and file employees, who are finding out how companies operate in bankruptcy protection: people get laid off and millions of dollars are spent on bonuses and hiring consultants and lawyers to come up with a plan to keep the company in business.

Last week, Nortel announced it will lay off 3,200 employees worldwide. The layoffs total roughly 10 per cent of Nortel's global workforce and will affect Ottawa employees.

With a report from CTV Ottawa's Paul Brent and files from The Canadian Press