Unify, a joint venture between Siemens and the Gores Group, will cut 50 per cent of its staff and refocus its product roster away from hardware, following a shift in the overall unified communications market toward software and Cloud services.
The company, which is announced the massive restructuring on Monday, and said it would also boost its channel strategy to work better with reseller partners.
Unify, formerly called Siemens Enterprise Communications, will shrink its workforce from 7700 to about 3900 - half of the eliminated jobs will be from Central Europe. The company will also close offices as it consolidates sites.
The company said the reorganization is needed because the unified communications market has undergone "dramatic shifts" away from hardware-based systems and toward software and cloud based products, leading to "pricing pressure."
"Unify must transform in order to remain competitive, so we are taking these necessary and very difficult steps in order to position Unify to fully respond to the needs of our customers and the marketplace," Dean Douglas, Unify CEO, said in the press release.
Just last week, IDC released the results of its first quarter report on the global video conferencing and telepresence hardware market, where revenue fell 16 per cent year-on-year, and units sold fell 6.2 per cent.
The drop, according to IDC, was attributable in large part to an increase in cloud and software-based options that often are cheaper and simpler to deploy.
The top three vendors in the market - Cisco, Polycom and Huawei - all have had declines in videconferencing revenue in their recent results. Cisco's videoconferencing revenue fell 22.4 percent, Polycom's dropped 8.4 per cent and Huawei's was down 2 per cent.
Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.