Just a few months after announcing its last corporate reorganization, Ingram Micro is yet again undergoing an internal restructuring across its global business, in what it says will create "organizational effectiveness."
Ingram Micro North America Thursday announced the kick-off of a global restructuring that it had previewed as part of its 2014 Global Organizational Effectiveness Initiative during its fourth-quarter earnings call earlier this month. While the restructuring was announced earlier, the extent of the changes on North America was not known until they took effect on Thursday. The extent of the global changes is yet to be seen.
"[This] was just one more step that we're taking to continue to be able to do that an reinvest in areas that we see success and new opportunities for solution providers to go be successful in the marketplace," Ingram Micro North American President Paul Bay said in an exclusive interview with CRN.
Last December, CRN learned that Ingram Micro was planning to shut down its Specialty Solutions Division, including physical security, AVAD, data capture/point-of-sale, mobility and consumer electronics, and redistribute the business units among other areas of the distribution company to better focus on "high opportunity areas."
The restructuring will result in the layoffs of 180 employees in North America, but Ingram Micro declined to comment on how many employees would be affected globally. It did say, however, that it anticipated saving $80 million to $100 million through the move.
"Although we've had some de-layering in the organization and efficiency, there are still over 300 positions just within the North American region that we're hiring for and we're recruiting for. It [goes back to] specialized resources and needs, and this isn't just in sales or vendor management or finance, it's literally across the entire organization and all of the different departments that we're hiring for," Bay said. "We're definitely going to continue to focus on what do our partners need and how do we best serve them."
Bay said the restructuring was designed to refocus the organization around current focal points such as healthcare, SMB, and the public sector, as well as vertical markets like retail and financial services that Ingram Micro is looking to gain a stronger foothold in. As for technology, Bay said that partners could expect further strategic emphasis on storage, virtualization, professional services and the cloud.
The 2014 Global Organization Effectiveness Initiative was established at the end of the fourth quarter to align the company infrastructure globally, delayer and simplify the organization and maintain investments that are important to the company's growing business going forward, according to the company's fourth quarter earnings report. While the restructuring is expected to cost $80 million to $100 million to complete in the beginning of 2014, the company anticipates large savings from the move starting in 2015.
Guy Baroan, president of Elmwood Park, N.J.-based Ingram Micro partner Baroan Technologies, said that he sees the move as a good one for both the distributor and his own business. The industry is changing so rapidly, he said, that anything Ingram Micro can do to stay on top of emerging technologies and remain "nimble" is something that will help his business.
"They're very invested in the cloud infrastructure and offering services and doing more than just pushing boxes and equipment," Baroan said. "From my perspective anything they can do to reinvent themselves and look at what their infrastructure is like and where they can cut down on the layers involved, I think that’s a positive."
Baroan said that while he felt Ingram Micro had been a hands-on and helpful distributor before, he said that he appreciates any de-layering that would bring the distributor closer and more involved with his business.
"As far as having more contact with Ingram Micro, the more contact the better," Baroan said. "If it's going to add more presence, the more contact and the more face time with us, the better for everyone."
For a company as large as Ingram Micro, it can be extremely hard to turn course and evolve strategically, Baroan said. With that comes some tough decisions, but Baroan said that as a partner he appreciates the forward-looking approach Ingram Micro has for technology because it makes his job much easier and gives him peace of mind as he recommends technology from Ingram Micro to his clients.
"Ingram is one of those companies that’s innovative...they sell equipment that changes...they have to keep changing and selling. You can't just be a box pusher. You're not going to make it. They've really got it," Baroan said. "They've nailed it."