Mitel has sold its mobile division and is now gearing up to decimate its remaining workforce
Ten percent of its workforce are being handed their pink slips and told to clean out their desks just a year after the comms giant was close to doubling in size last year through its proposed acquisition of Polycom.
The deal went tits up when Polycom got a higher bid.
Now, the emphasis for Mitel is to get as slim as possible, although other acquisitions are believed to be possible.
In February, Mitel completed the sale of its mobile division to the parent company of Xura, saying it would use the $350m cash proceeds to pay down its credit facility. This reflected its strategy to focus on the unified communications and collaboration market.
Getting rid of staff will result in the outfit taking a charge in the range of $25 million to $35 million this year.
Mitel chief executive Richard McBee said that with the mobile divestiture finished the outfit was taking a “proactive cost reduction action to align its operating expenses with our current and future business investment needs”. With language like that we can sort of see Mitel’s problem – a company which can’t say “sacking staff to save money” might be having difficulties facing broader reality issues.
McBee said he was “pleased” with the Q1 results, and “especially pleased” with Mitel’s performance in its larger European markets “where Mitel’s financial strength helps us to expand on our leadership position in the region”.
Mitel’s GAAP net losses widened year on year during the quarter ending 31 March 2017, from $12.9m to $19.7m, on revenues that fell slightly from $228.1 million to $223.1 million.
