Avaya Asia jobs are safe

Employees of Avaya Asia Pacific, a provider of corporate networking solutions and services, have been spared from job cuts following its parent company’s recent announcement that it had slashed 5,000 jobs.

SINGAPORE--Employees of Avaya Asia Pacific, a provider of corporate networking solutions and services, have been spared from job cuts following its parent company’s recent announcement that it had slashed 5,000 jobs.

Last week, US-based Avaya Inc said it had accelerated its restructuring plan--including cutting 5,000 jobs, or about 18 percent of its total work force of 28,000--since June. The job cuts are 2,000 more than what it announced in June.

"Asia Pacific (including Japan) employees are not among the 5,000(employees) affected," an Avaya Asia Pacific spokesman said in an email interview yesterday.

Avaya had 902 workers in Asia Pacific. It has offices in countries including Singapore, Japan, Korea, China and Australia as on June 30, 2001. This is compared with 800 employees at the start of this year, he noted.

Avaya had earlier reported that earnings from ongoing operations for the third quarter, ended June 30, rose to US$67 million from US$32 million a year earlier. Revenues fell about 9 percent from US$1.71 billion to US$1.89 billion in the same period last year.

The company cited sales outside the US as a reason for its doubling in net income. However, the spokesman declined to reveal how much Asia contributed to its worldwide net income and revenue in the third quarter.

"As a corporate policy, we do not give breakdown of net income and revenue by region," he said.

Meanwhile, Avaya Asia Pacific COO and regional vice president (Business Partner Programs) Dan McConaghy declined to say what short and long term measures Avaya Asia has taken, or plans to take in the next 6 to 12 months, to weather the current global economic downturn.

However, he said in an email interview yesterday that on a worldwide level, in the fourth quarter and beyond, it expects "even greater reductions in both costs and expenses as we accelerate our restructuring and realize the savings resulting from over 5,000 employees leaving the business in the US."

Avaya expects to exit fiscal 2001 at a selling general and admin (SG&A) expenses annual run rate which is US$600 million lower than the total SG&A expense in fiscal 2000, McConaghy noted.

As for the impact Avaya’s cost-cutting measures would have on its business in Asia, McConaghy said the company believes that it has made significant progress through reductions in the US, and that it will continue to monitor the economic environment.

"Our intention is to align our cost structure with revenue expectations and we will take appropriate actions to do that," he said. "Beyond that, we cannot speculate on what actions we would take."

He said in light of the current economic conditions, Avaya now expects global fourth quarter revenues to be approximately 20 percent below the fourth quarter of fiscal 2000.

This will be driven by "an expected year over year decline of about US$225 million in connectivity solutions revenues primarily from service provider customers, and by delays in customer purchases of traditional voice products."

The Avaya Asia Pacific spokesman also declined to comment on how much the company expects Asia to contribute to total net income and revenues for the fourth quarter and full year.

Avaya's customers in the region include the Singapore Telecommunications Group, SK Telecom, Citigroup, Pacific Century CyberWorks and Bank of East Asia.

In the US, shares of Avaya Inc last traded at US$12.60 , down US$0.10.

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