Ribbon Communications has rolled out a restructuring initiative, including layoffs, designed to further streamline its operations and improve customer delivery.
When asked for details on what the company is calling “workforce reductions,” Ribbon provided the following statement: “At this point our focus is on the refinement of our research and development activities and consolidation of excess and duplicative facilities … and being in a stronger position to better serve our global customer base. We expect savings realized from these consolidation efforts to be reinvested in strengthening R&D and other activities.”
The company did say it expects to record about $6 million of restructuring expense associated with workforce reduction initiatives.
The facilities initiative includes consolidating Ribbon’s north Texas site into a single campus housing engineering, customer training and support, and administrative functions, and a reduction or elimination of certain facilities elsewhere. In addition, it plans to substantially consolidate its global software laboratories and server farms into two, lower-cost North American sites.
John Macario, Ribbon’s senior vice president of channel marketing, tells Channel Partners these moves will “definitely benefit our partners.”
“Our continued focus is on helping our partners transition their businesses to the cloud,” he said. “A great example includes the availability of our cloud-based Session Border Controller (SBC) Software Edition (SWe) Lite in the Microsoft Azure Marketplace. The SWe Lite is a virtualized enterprise SBC that delivers small and midsize businesses (SMBs) cost-effective, advanced unified communications (UC), collaboration and security capabilities directly from the Azure Marketplace. This is a very dynamic solution for our Microsoft partners.”
The restructuring will not change the way Ribbon is working with its channel partners, Macario said.
“We are only accelerating our efforts with regards to our channel,” he said. “For example, we will be launching several new partner initiatives, a new portal and we are increasing co-marketing programs with select partners.”
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As SMBs and enterprises continue to move their operations to the cloud, Ribbon’s partners’ business models also are rapidly changing and “our refined focus on R&D will only help support these initiatives,” Macario said.
The company estimates the restructuring initiative will reduce its cost footprint by about $25 million on an annualized basis once complete, and it will save about $10 million during the remainder of fiscal 2019.
The company plans to discuss its restructuring initiatives in more detail during its next quarterly earnings conference call.
“We are encouraged by our recent market share gains and the growing market acceptance of our virtualized, software-only portfolio of products,” said Fritz Hobbs, Ribbon‘s president and CEO. “Our service provider and large enterprise customers are demanding greater software capabilities and features, and we believe focusing our R&D activities will better position Ribbon over the next several years to take advantage of these market opportunities.”