Arris confirmed that it plans to reduce its workforce by about 10% worldwide, or more than 800 employees, a cut-back that comes about seven weeks after Arris completed its $2.1 billion merger with U.K.-based set-top and access network equipment maker Pace Plc.
“We are looking across the entire scope of the ARRIS enterprise to identify areas where we can find cost savings, eliminate redundancies, and increase shareholder value,” an Arris official said in a statement to Multichannel News. “With this in mind, we have a headcount reduction goal of about 10 percent worldwide. We understand how hard these changes will be for the employees concerned and are committed to helping them through this difficult transition.”
Arris did not announce an exact count of the employees being impacted, but Arris's base of workers expanded to about 8,000 following the Pace acquisition.
According to one source, Arris operations in areas such as Horsham, Pa., along with Suwanee, Ga.; and former Pace operations in Boca Raton, Fla., as well as some former 2Wire locations (Pace acquired 2Wire in 2010) were included in this reduction.
“We do not break out employee numbers by market or region,” the Arris official said via email.
Two sources indicated that more workforce reductions could be coming. "We have just started these actions. This is a process that will be continuously reviewed," Arris said.
Arris’s post-Pace restructuring also comes after the company posted lower Q4 2015 revenues, brought on in part by slower sales to AT&T and telco TV partners, and softer-than-expected Q1 2016 guidance.
On the brighter side, Arris chairman and CEO Bob Stanzione said on the call that the cable side of the company’s business looked “fairly good” as MSOs announced solid revenue forecasts and capital expenditures for 2016. Another bright spot was Arris’s Network and Cloud business, which posted its strongest quarter of the year, led by record shipments of its flagship converged cable access platform (CCAP), the E6000.
Stanzione also noted that Arris was in the process of addressing overlaps of product roadmaps and corporate functions, with the goal of having opex reductions “substantially completed” by the first half of 2016. “We remain enthusiastic about the benefits of the combination [with Pace] and are committed to getting this integration done quickly,” he said then.
Arris has already identified its post-merger leadership team. Among those decisions, Larry Margolis was tapped to lead the integration of Arris and Pace as EVP of corporate and strategy and administration. Larry Robinson and Bruce McClelland, meanwhile, will remain as presidents of their respective business units (McClelland runs the company's networking and cloud unit, and Robinson heads up customer premises equipment).
Long-time Arris exec Ron Coppock, meanwhile, now leads a new, dedicated international sales organization and continue to lead marketing, as president of International Sales and Global Marketing. Tim O’Loughlin, an exec late of Pace, is now president, North American sales.
Arris cut its workforce by about 500 employees – from 7,000 to roughly 6,500 – in the months following its April 2014 acquisition of Motorola Home.