Polycom is the latest tech vendor to announce job cuts, as the company continues to deal with the transition in the video conferencing and unified communications market from hardware to software and the cloud.
Officials with the company, which is the second-largest video conferencing vendor behind Cisco Systems, said Polycom will cut 6 percent of its global workforce of about 3,800—which comes out to about 230 jobs—as they look to trim expenses. The company also will look to reduce the amount of office space it leases. The layoffs will include jobs in R&D, sales and marketing, according to company executives.
"While these are very difficult decisions to make, they are necessary to better align expenses to revenue, and to reallocate cost towards those areas with better returns," CEO Peter Leav said during a conference call with analysts and journalists Jan. 22 to discuss fourth-quarter 2013 financial numbers.
Overall, the company lost $2 million in the quarter on revenue of $347.9 million, a drop from the $353 million it reported during the same period in 2012. The company's UC Personal Devices business saw a 33 percent increase in revenue, but its UC Group Systems unit—which accounted for 63 percent of all of Polycom's revenue—had an 8 percent drop.
Leav, who took over as CEO in December 2013, said the UC and video conferencing industry—like others—is seeing a rapid shift from hardware to software. Users are demanding to be able to connect via any device—including smartphones, tablets and PCs—and at the same time organizations are increasingly looking to the cloud to deliver such services. Polycom is working closely with Microsoft to leverage the software maker's Lync UC software in its products, particularly its personal unified communications offerings.
Already several tech vendors have announced job cuts for 2014. Intel officials earlier this month said they will cut about 5,000 jobs, which is about 5 percent of its workforce. IBM, which laid off thousands of workers last year and saw revenue in the fourth quarter fall 5 percent, said it was setting aside $1 billion to cover charges related to expected job cuts this year. Other companies announcing reductions in their workforce include Texas Instruments and Hewlett-Packard, which said that the massive job cuts that are part of the company's multiyear restructuring plan will grow from 29,000 to 34,000 by the end of this year.