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09 Sep 2022 12:01
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Avaya winds down business in Russia. The office is closed and staff is threatened with layoffs. What caused it is unknown. This is either anti-Russian sanctions, or part of Avaya’s plan to massively lay off staff around the world amid major financial problems.
Russia and Avaya part ways
The American company Avaya leaves Russia. This is not a temporary suspension of activities, but a complete curtailment of business. The first to report it Telegram channel «Import substitution in IT. Equipment and software” with reference to the employees of the Russian office of the company.
Avaya specializes in development and construction corporate communication networks. On average, approximately 43% of a company’s revenue is generated by its foreign affiliates, including the Russian one. Avaya is one of the main competitors bygone From Russia Cisco.
According to available data, the Avaya representative office in Russia will be completely disbanded, despite the fact that it brought the company, albeit small by the standards of a transnational corporation, but still profit. Staff Russian office will be dissolved.
Avaya was founded in 2000 and is headquartered in the United States. The company decided to open its representative office in Russia in the first years of its existence. The idea was implemented in August 2005, when in Moscow Avaya CIS LLC appeared.
More regarding the Russian “daughter” of Avaya
The Russian legal entity Avaya was registered with an authorized capital of 22.98 million rubles. (data Unified State Register of Legal Entities). It has no Russian founders – the company is wholly owned by two foreign organizations, Avaya representative offices in Luxenburg.
Will Avaya return to Russia is a very big question
The position of General Director of Avaya CIS» since 2010 has been Alexander Parkhomenko. According to the results of 2021, the company received revenue in the amount of 1.3 billion rubles. compared to covid 2020, the drop was 4% (data “contour focus»).
At the same time, the amount of net profit in 2021 reached 245.4 million rubles. The actual number of Avaya CIS personnel as of September 2022 has not been established. As of December 31, 2021, the company employed regarding 70 people.
Isn’t it regarding sanctions?
The reasons why the Avaya management decided to liquidate the Russian office of the company were not disclosed by the time the material was released. There is also no word on how long the Avaya CIS liquidation process will last, or whether its employees will receive compensation or an offer to move to another country in order to continue working for Avaya.
One of the reasons may be the anti-Russian sanctions that hit the country following February 24, 2022. Hundreds of foreign companies left Russia, many of which are directly related to the international IT sphere. The lion’s share among them is american corporations.
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But it may well turn out that the main motive for Avaya’s departure from Russia was not at all sanctions. The company has been in an unenviable financial position for the last few years of its existence.
What’s Wrong With Avaya Money
A prime example financial The instability of the company is the situation in which Avaya found itself at the very beginning of 2017. She was forced to file a declaration of bankruptcy. Documentation attached to the statement said the company’s total assets are valued at $5.5 billion, while its total debt is $6.3 billion.
By declaring itself bankrupt, Avaya hoped to restructure liabilities and rebuild its business. How informed CNews, Avaya completed financial restructuring in mid-December 2017.
However, almost six years later, the situation has not changed much. 2018 was marked for Avaya by holding IPO on New York Stock Exchange. But for the full year, its revenue sank 13% to $2.9 billion compared to 2017. In 2019, revenue was at $2.89 billion.
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In 2020 and 2021 The company failed to improve its position. It completed 2021 with a slightly grown up (up to $2.97 billion) revenue. But instead of net profit, the company earned net loss in the amount of $13 million.
It got to the point that in early September 2022, Avaya announced a massive reduction in its worldwide staff. It is not yet known how many people it will deprive work placesbut, according to the company, by thinning out the staff, it will be able to save up to $ 250 million annually.
