Last week Avaya announced that approximately 180 jobs had been scrapped in a fresh round of layoffs.
This represents a sizable reduction in the vendor’s overall workforce, equivalent to three percent. However, the company was quick to position the news as a restructuring rather than mass layoffs.
Indeed, in an official statement, an Avaya spokesperson stated:
Other positions are being created that may be filled by additions to our team who bring differentiated skillsets and expertise, consistent with our transformation as a leader in enterprise CX.
In a discussion with UC Today, Zeus Kerravala – Founder and Principal Analyst at ZK Research – also emphasized this point, claiming that while there will be a net reduction in staff, it’s “not as dramatic as people think.”
He confirmed that he had spoken to Marylou Maco, Chief Revenue and Customer Experience Officer for Avaya about the layoffs, and while she could not provide specific numbers, she informed him that “a good percentage of the head count that's being reduced is actually being reallocated to different areas.”
For Kerravala, this is the bigger story: Avaya’s shift in strategic focus.
The Analyst explained that Avaya is looking to target more Global 1500 businesses, which means a reduction in the number of accounts a manager handles, from 50-80 to a maximum of 10.
This requires more salespeople with different skills, particularly those who can grow accounts.
Kerravala discusses how historically, Avaya tried to be all things to all people, recalling a time when it tried to launch an in-room conference camera in a very crowded market, as an example of this.
However, now, the company has cut those types of products, so they no longer need the people managing them.
He likened Avaya’s restructuring to other notable companies within the sector, such as Cisco and Amazon, who frequently reduce headcount and move talent around, describing it as “a necessary part of staying in front.”
Frankly I think it [the restructuring] has been part of the plan all along. You can't transform the company; transform the way it operates and keep the same people.
New CEO, New Direction?
Prior to the layoffs, Avaya had made headlines for the seemingly sudden decision of Alan Masarek, President & CEO of Avaya, to retire at the end of the year, with Patrick Dennis set to take over as CEO from September 1.
