Avaya cuts outlook, jobs

Lucent spin-off Avaya cut it revenue guidance and announced plans to eliminate at least 11% of its workforce.

Citing a slowdown in sales in late May and early June, the enterprise networking company expects revenues from ongoing operations to decline four percent to six percent for its fiscal third quarter compared to the third quarter 2000. For its fourth quarter, ending September 30, the company expects revenue to slip four percent to eight percent.

In addition, the company announced that it would eliminate at least 3000 jobs through a combination of early retirement, voluntary separations and job cuts. The cuts are aimed mostly at U.S. management.

The company is also consolidating and restructuring under-performing parts of its business, including sections of the communications solutions and services segments.

These steps, said a company spokeswoman, are being taken to accelerate the restructuring program the company set in motion in March 2000.

“We’ve already taken $100 million per quarter [in expenses] out of the business,” she said. “We expect with this new program to eliminate $50 million in expenses in the third quarter and in the fourth quarter an additional $80 million. …With these new programs we expect to start the new fiscal year spending $230 million less every quarter than we did in the fourth quarter 2000.”