Avaya has kickstarted its second round of layoffs in just four months.
The layoffs are reportedly much greater than those announced in July when the company let go of 180 employees (equating to three percent of its workforce).
Avaya said in a statement to CX Today:
“Avaya continues to align its investments in people and resources to enable us to compete and win in the marketplace. Our team has made great strides in FY24, focusing on customers to improve retention, extend contracts and achieve our targets.
"As we enter our FY25, we continue to align our people and investments to instil the disciplined and disproportionate focus on customers we are best positioned to serve and the innovations that are most crucial for their success.
"Avaya is uniquely positioned with the people and portfolio to deliver the comprehensive solutions the enterprise market demands – demonstrating our commitment to building and sustaining a profitable company.”
Zeus Kerravala, Principal Analyst at ZK Research, confirmed to CX Today: "The cuts are deep."
Having sat on a briefing call with Avaya’s senior management, Kerravala added:
They’re letting go of entire areas that don’t align with the focus on large accounts.
However, Kerravala did add that he expects some reallocation and that Avaya will staff up in areas like account management for larger customers.
"The result will be a net reduction," he continued. "But with reallocations to support Avaya’s G1500 (top 1,500 global clients)."
How Did Avaya Get Here?
Once upon a time, Avaya was the de facto standard in contact center technology.
As such, they onboarded a mass clientele, ranging from small businesses to many of the world’s largest enterprises.
However, as the industry transitioned, Avaya missed the mark, and the brand hit hard times – including two bankruptcies over the past seven years.
Over that time, many of its customers – mostly small and mid-sized businesses - shifted to more agile, cloud-based competitive offerings.
Yet, entire segments of customers didn’t disappear. Avaya still has very small customers alongside very large ones.
“What’s happened over time is that servicing those smaller clients has become more expensive, especially with clients distributed across different countries,” added Kerravala.
Of course, it might have been easier if an entire segment had dropped off, but business doesn’t work that way. Instead, Avaya lost a little at a time. Kerravala summarized:
I think the mistake Avaya made in the past was trying to be all things to all people.
The Avaya under Jim Chirico could certainly be accused of that. Indeed, some have suggested that he overly focused on prepping the company for sale instead of making it healthy.
When that didn’t happen, Avaya needed significant restructuring. As such, Alan Masarek came in and slow-rolled that transition.
Now, Patrick Dennis – who took over as Avaya CEO in September – "wants to do it all at once," according to Kerravala.