Extreme Networks announced the next step in its strategic
transformation with a restructuring plan that will lower operating costs in
FY’12 by approximately $20 million with the goal of enabling the company to
achieve consistent double digit operating income.
The restructuring plan will affect approximately 110
people or 16 percent of its worldwide workforce, and the company will take a
pretax restructuring charge of approximately $3.5 million in its fiscal Q4
which ended July 3, 2011.
As part of the organizational changes, the company will
be consolidating most of its software engineering resources
into its current facilities in lower cost venues, and expects the consolidation
to be complete by the end of the calendar year.
Transitioning these resources to lower cost areas will
enable the company to enhance its R&D investment in new product development
and innovation by increasing headcount over the course of the year. The
company is reducing headcount in all functional areas outside of R&D, to
better align its cost structure with it stated operating model.
“Extreme Networks is progressing as planned with its
strategic company transformation. In Q3 we announced a shift in our
strategic focus to target select high-growth vertical markets by aligning
designated sales and marketing resources to bring more focus to these market
verticals. We also focused our R&D investments by aligning our efforts
around a single product architecture which is expected to raise R&D
productivity and drive more feature velocity,” said Oscar Rodriguez,
president and CEO for Extreme Networks.
“Now, we are rebalancing employee levels in all
organizations to drive down fixed costs, while continually working to lower
variable operating costs to ensure market competitiveness. We expect
these changes will allow us to drive a competitive stance by increasing R&D
resources to advance product leadership and by driving more investment in field
marketing and brand awareness, while allowing the company to attain consistent
double-digit operating income,” Rodriguez added.
By TelecomLead.com Team