Mitel Warns On Revenue, Will Cut 200 More Jobs


It appears to be two steps forward, one step back for Mitel.

The beleaguered UC and collaboration company, which has been through several layers of restructuring in the past two years amidst financial challenges and a history of channel conflict, said this week that it would cut 200 full-time employees, close what it termed "excess facilities" and revise its quarterly earnings guidance more than $10 million lower.

Ottawa-based Mitel said in a statement that it expects revenue for the quarter ended July 31 to come in between $138 million and $139 million, well below the previously provided range of $150 million to $155 million.

[Related: Mitel CEO To Partners: Get Ready For The Next Level]

Richard McBee, Mitel's CEO, blamed project delays and economic uncertainty for the shortfall.

"Our 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," McBee said in a statement this week. "We remain confident in our strategy and product leadership, however we are taking immediate actions to size the business cost structure consistent with our broader macroeconomic concerns."

Mitel has been challenged since its disappointing April 2010 IPO, when shares of the company were priced below expectations and sank 12 percent following Mitel's debut. Mitel also cut 20 percent of its work force that same year.

But while its revenue picture is still a concern, Mitel has had a stronger year with the channel, and now sells 70 percent through solution providers in North America, and close to 100 percent in the rest of the world.

McBee, who became Mitel's CEO in early 2011, focused on a strategy called 3+1, in which Mitel focused its energies on UC, midmarket customers and the trend around voice virtualization. Throughout, Mitel has offered the channel a number of new incentives and expanded its relationships around virtualization opportunities, app development and Infrastructure-as-a-Service.

Mitel will release full results for the first quarter of 2013 on Aug. 30.

Published Aug. 10, 2012