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Mitel slashing 200 jobs

Company misses revenue marks, while investing in its channel business

Ottawa-based networking vendor Mitel Networks will be eliminating approximately 200 full-time jobs as part of a short-term restructuring plan.

Company CEO Richard McBee said recent Mitel results reflect orders booked that did not ship in the quarter, implementation delays on several customer projects and a general deterioration in the macro environment.

Mitel announced that it expects revenue for the quarter ended July 31, to be down from expectations. The company said revenue would be in the range of $138 million to $139 million, compared to the previously provided range of $150 million to $155 million.

McBee added that while remaining confident in the company’s strategy and products, he has to take immediate action to size the business cost structure consistent with Mitel’s broader macroeconomic concerns.

That means during the current quarter ending October 31, Mitel will implement a restructuring plan to include a reduction of approximately 200 full-time employees, and the closure of excess facilities.

Mitel said it will provide more details when it releases its financial results for the first quarter of fiscal 2013 after the market closes on August 30. This news breaks some market momentum for Mitel as it started trading on the Toronto Stock Exchange on July 27th of this year.

At the beginning of this year Mitel invested significantly in its channel. The unified communications vendor implemented a series of strategic initiatives to strengthen its North American channel program highlighted by a new Authorized Partner Service Program. The new program shifted local service support for some of Mitel’s product portfolio to channel partners. Mitel channel partners can also subcontract to deliver local service and support for Mitel’s product portfolio in selected areas. The Authorized Partner Service Program was part of the Mitel’s broad 3+1 strategy, which intends to move more direct business to the channel.

The company also made a slew of new hires for the channel business taking top professionals away from rivals Avaya, Alcatel-Lucent, and Polycom. These hires include: Renato Mariani, vice president, Field Marketing, North America; Stan Holcomb, vice president, Global Services Solutions, Dave Hand, vice president of Sales, Central Region; and Leo Cortjens, vice president of Sales, Eastern Region.