When was the last time you heard any company CEO announce a plan to slash 50% of headcount?
That’s what Dean Douglas of Unify (formerly Siemens Enterprise Communications) said recently:
The restructuring plan, which is the subject of discussions with multiple stakeholders, will streamline the company’s operations. It is expected to result in an overall reduction in headcount of approximately 3,800 people out of a workforce of nearly 7,700 worldwide, with Central Europe accounting for 50% of the reduction.
The insightful Dave Michels at TalkingPointz laid out this blunt conclusion:
Everything that Douglas is doing is right, but it’s a bit late and subsequently a bit drastic. It’s virtually impossible at this point to “get ahead” of Clo/So/Mo and software transitions. On the positive side, Ansible is getting highly favorable responses. The bigger problem is Ansible is targeted to enterprises which are reluctant to adopt new technology. That means it could take years for Ansible to build acceptance and momentum. During that time, competitors will imitate its most beloved capabilities.
However, if Douglas maintains profitability, sheds the hardware, reduces headcount to a nimble organization, and develops a truly innovative communications platform – I can see big firms (Google, Oracle, HP, IBM) swooning to acquire – that could be good for customers, Unify execs, and investors.
I agree with Dave here. The reason 3,800 people are going to be out of a job soon is because Unify executives acted too little too late, and now the “plan to streamline the company’s operations” will be very painful. Instead of cutting off a finger or two earlier, it now has to cut off two arms. Oh wait, more like the lower body. It’s not going to be pretty…
Looking at comments left on Glassdoor.com, it appears Unify employees have been suffering from decreased morale and job uncertainty for a while. There are numerous complaints about lack of competitive salaries and benefits, lost in restructuring, and no career advancement. When did management start losing touch with the workers – far too ironic for a company called Unify specializing in unified communications, eh?
Anyway, I’m not so sure that those big firms would be interested in acquiring even a slimmed-down Unify. Google is too cool, Oracle wouldn’t know what to do with OpenScape or Ansible, HP has its own downsizing to worry about, and IBM has no interest in telecom anymore. Maybe Alcatel-Lucent or Microsoft? Who knows, but right now it’s fair to say that Unify is on its own for a while…
Nobody wants to see another distressed company in the telecom industry. My hope is that the executives will eventually correct the course and stabilize the company. Having a competitive industry landscape is always a sign of health.