Extreme Networks Layoffs Confirmed; Not A Result Of COVID-19

‘While coronavirus is making all companies rethink their business, our decisions are more related to our existing plans and changes in the market,’ the company says.

Extreme Networks is laying off part of its workforce, but it’s not blaming the COVID-19 coronavirus pandemic for its latest round of layoffs, the company told CRN.

The San Jose, Calif. networking firm in an email Wednesday said it’s focused on becoming the industry’s first cloud-driven enterprise networking vendor as it just finished ingrating every piece of Aerohive Networks' technology into its portfolio that it acquired in August.

"We are aligning and converging our global teams so we can dynamically respond to the market and changes in investment profiles. Unfortunately, this means some of the positions have become redundant. While coronavirus is making all companies rethink their business, our decisions are more related to our existing plans and changes in the market," the company said in a statement.

[Related: MSPs Brace For Sales Hit As Pandemic Sparks Customer Layoffs]

Extreme Networks did not respond to CRN's question regarding which business units specifically will be affected by the cuts. TheLayoff.com, a website that tracks downsizing across the corporate world, reported that 12 percent of the company's workforce was affected by the latest purge. The company did not respond to a question asking for confirmation of that figure.

Reports on that site suggest that the majority of the layoffs are impacting development and product management employees in the firm's network access control (NAC) and Extreme Management Center (XMC) product units.

Extreme Networks' Chief Operating Officer Norman Rice told CRN last week that the company hit a few supply chain road bumps as the COVID-19 coronavirus pandemic led to issues with component makers in Asia. The firm last week put out a business update outlining the impact of COVID-19 to its financial results for its third fiscal quarter, which Extreme is slated to announce in June.

While Extreme expects that its supply capacity will be at or close to 100 percent by May, the company still expects some residual effects until June as business is just beginning to ramp back up now for some component makers. Extreme last month also began to see some unexpected disruption in production in Mexico as the country began its own shutdown, Rice said.

Extreme this week revealed several financial assistance programs for partners in the midst of the global pandemic, including deferred payments, extended rebates, and longer certifications deadlines.

The company also brought on a chief marketing officer on Tuesday; former Mitel chief marketing officer, Wes Durow. Rice said that Durow will help Extreme in its marketing efforts as it becomes a cloud-first company.

Extreme Networks’ stock price has plunged since the company closed its $210 million acquisition of Aerohive last August, nosediving 64.44 percent from $8.10 per share on Aug. 9 to $2.88 on Wednesday.