CXtec Layoffs Follow Change In Cisco Partnership

The layoffs impacted approximately 12 percent of the Syracuse-based company's workforce, including 42 employees at its headquarters and three employees at its Buffalo, N.Y., branch, which is closing.

CXtec (VARBusiness 500 Rank: 231) disclosed the layoffs as part of a reorganization that will see it split its Cisco Systems business into a separate division. In addition to Cisco, CXtec also works with a number of other networking and communications vendors, including 3Com, Hewlett-Packard and Nortel Networks.

While details of the reorganization are still being worked out, the move to separate its Cisco-dedicated resources is expected to enable CXtec to better serve its Cisco customers and to improve its standing with the San Jose, Calif.-based vendor, said Frank Kobuszewski, vice president of the technology solutions group at CXtec.

"It better positions us from an advanced technologies standpoint," Kobuszewski said, referring to Cisco-designated advanced technologies such as VoIP, wireless and security. CXtec will also be able to focus on newer technology areas Cisco is moving into, such as digital signage, he said. "It allows our Cisco resources to not be distracted by other things."

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CXtec sells new equipment as a Cisco Silver partner, but also had been refurbishing and certifying used Cisco equipment under its own equal2new program via an exclusive arrangement with Cisco.

Local news reports in Syracuse said the main reason for the layoffs was Cisco's decision last October not to renew the portion of its partnership agreement that enabled CXtec to include used Cisco gear in its program. CXtec lost 30 percent of its revenue and more than 600 customers as a result, according to the reports.

Kobuszewski downplayed the loss of that agreement and its role in the reorganization.

"We handled those bumps and issues last year. That's not driving it," he said, noting that while the loss of that agreement did have financial consequences, CXtec has morphed that business into sales of Cisco-certified refurbished gear.

CXtec CEO William Pomeroy said in an interview with WSYR-TV last week that the company tried to avoid the layoffs.

"Doing something like this is not very much fun, and we're not particularly having a very good day right now," Pomeroy said. "We like to think that we're a special place to work. We have been named to Great Places to Work for the last four years, and we really worked hard for about eight months to try to avoid this from coming up."

CXtec last month received the VARBusiness VAR 500 Editors' Choice Award for Business Excellence.