Avaya Layoffs Follow Turbulent Financial Times

The UC giant has kicked off a ‘significant’ round of cost-cutting measures to the tune of $250 million that include an unspecified number of layoffs, which began this week.

Unified communications powerhouse Avaya has initiated cost-cutting measures that includes an unspecified number of layoffs.

Avaya confirmed the latest round of layoffs to CRN on Wednesday.

“As previously stated, lowering our costs, including through a reduction in our workforce, is necessary to position Avaya as a more agile and innovative organization and to align Avaya’s cost structure with our contractual, recurring revenue business model,” said Avaya CEO Alan Masarek in an emailed statement about the layoffs.

Masarek, who joined Avaya in August, said that the firm will “minimize the impact to customers with respect to sales and support and remain committed to our long-range innovation and product development roadmaps.”

“We are committed to treating impacted employees with utmost dignity and respect and seamlessly providing our customers with outstanding communications solutions and support,” Masarek said.

[Related: New CEO Alan Masarek: ‘Avaya’s Opportunity For Future Success Is Stronger Than Its Past Performance’]

Avaya said in a July press release that it would begin “significant” cost-cutting measures to the tune of $225 million to $250 million during this quarter — its final fiscal quarter of the year. The layoffs that were announced on Tuesday are expected to help the company reach net savings at the top-end of the $250 million that Avaya disclosed, the company told CRN in an email.

Avaya’s Financial Trouble

Avaya has been a company in flux in recent years. The Durham, N.C.-based UC giant reported that it had missed its revenue target in May, followed by a substantial earnings miss with revenue that declined 20 percent during the company’s third-quarter 2022, which ended June 30. The company then made the move to replace Jim Chirico, the company’s CEO since 2018. Masarek was brought on effective Aug. 1 as president and CEO after serving as Vonage’s CEO for six years.

Masarek has been credited with pivoting Vonage away from a consumer-focused service provider with shrinking revenue to a cloud communications specialist serving business clients, and he hopes to set up Avaya for future growth through a focus on the company’s large base of large enterprise customers, coupled with a major cloud transition for the company, he told CRN in last month.

Avaya during its Q3 2022 that ended June 30 posted revenue of $577 million, down 20 percent year over year. Masarek attributed the revenue loss to “operational and executional shortcomings” set against the backdrop of a volatile economy.

Avaya has not filed a Worker Adjustment and Retraining Notification, or WARN notice in the state of North Carolina, a spokesperson for the North Carolina Department of Commerce told CRN. A company must file a WARN notice if it plans to lay off at least 500 employees, according to federal law.

Avaya changed its headquarters to Durham, N.N. in 2020 from its old home in Santa Clara, California. The ompany has more that 8,000 global employees as of 2021.