Mitel set to cut global workforce by 10%

Mitel is targeting a 10% cut in its global workforce by yearend in a move that CEO Rich McBee described as 'proactive cost reduction' based on the loss of circa 330 jobs.

This is expected to generate annualised savings of around $30m while the cost of job reductions is said to be in the range of $25m to $35m this year.

The news was announced with the release of Mitel's Q1 results and follows the Canadian vendor's sale of its mobile software division (based on the $545m acquisition of Mavenir in April 2015) in February this year.

Richard McBee, Chief Executive Officer, said: "With the mobile divestiture behind us we are taking proactive cost reduction actions to align our operating expenses with our current and future business investment needs. This includes a workforce reduction of approximately 10% expected to be completed between now and the end of the year."

Chief Financial Officer Steve Spooner added: "During the quarter Mitel took several major steps to fundamentally strengthen our capital structure and operating model.

"We paid down $364m in debt, secured attractive new credit facilities at significantly lower interest rates, initiated a stock buyback programme and initiated cost reduction actions to position the company to achieve its long-term financial targets."

For its first quarter Mitel reported a dip in revenues to $223.1m (down from $233m in the same period last year), and a net loss of $21.1m.

Recurring cloud seats grew by 45,000 during the quarter and now stand at 588,000.

"In Enterprise, we drove steady market share gains," adde McBee. "We were especially pleased with our performance in the larger European markets, and recurring cloud grew in-line with our expectations as orders continued to be strong, and we continued to ramp our installation capacity."