Avaya Makes Rapid Recovery from Bankruptcy in Past 14 Months

Magnifying Glass on Avaya
Avaya customers had some cause for concern in February 2023, as the company filed for Chapter 11 bankruptcy. That followed a difficult first six months for new CEO Alan Masarek, who took over in August 2022.

Thankfully, the process lasted just 76 days and they exited Chapter 11 in May of the same year. 14 months on from Masarek’s arrival, Avaya is showing signs of a rapid recovery – as this post will discuss.

The unique challenges of enterprise communication

Enterprise communication is vital for businesses. It underpins everything they do, making it critical for them to operate efficiently and properly serve their customers. For example, 86% of employees cite a lack of effective communication and collaboration as the main causes of failures in the workplace.

This critical nature can make it difficult to manage. Not least because the industry has seen a massive shift over the past few years. The Covid-19 pandemic and remote working revolution forced a quick response from communication companies and customers alike. Needless to say, many were caught off guard and not all decisions turned out to be the correct ones.

Avaya’s central role in enterprise communications

Within that critical enterprise communication landscape sits Avaya. Founded way back in 2000, the company has long been a go-to choice for telecommunications including call centre solutions. Over time, that’s evolved to unified communications, cloud communication and collaboration technologies.

Today, Avaya has around 90,000 customers globally, which includes almost 90% of Fortune 100 companies. Needless to say, these customers were concerned by the Chapter 11 bankruptcy process. However, a fast resolution and impressive recovery has put those fears to bed.

Avaya recovery – how it happened

Many will point to the arrival of CEO, Alan Masarek, as the starting point of Avaya’s recovery. He took over from Jim Chirico in August 2022 and it wasn’t long before Avaya was cutting costs. In September 2022, they announced $23-26 million in restructuring costs (such as employee severance) with a view to save between $225-250 million annually.

Next was their Plan of Reorganisation, before the company entering Chapter 11 bankruptcy. Their Plan of Reorganisation was approved by the court, allowing them to become financially viable.

But that was just the first step. As part of a Plan of Reorganisation, Avaya had to detail how they would correct their balance sheets, improve debt-to-equity ratios and boost profitability. In other words, how they would avoid a recurrence of bankruptcy going forwards.

Going beyond voice with a unified approach

A key part of Avaya’s transformation has been their new product focus. It’s well known that Avaya is one of the global leaders for voice communication. That’s now paired with functionality for digital communication, chat and socials.

The Avaya Experience Platform, for example, features Avaya Social Connections, which enables better management of communication with customers through social channels – including transferring interactions to different agents and supervisors.

That’s bolstered by a suite of AI tools, including everything from AI Virtual Agents to AI Noise Removal on human agents’ calls. Organisations can also use AI to monitor performance, including automatically generated word clouds to understand trends and hot topics.

As such, customers can now get the modern solutions they need alongside the hardware and support they’re used to from legacy enterprise communication companies like Avaya. It’s a much more unified approach, despite the shift in customer demand.

Loved by customers and partners alike

Avaya’s new approach is summarised by their “innovation without disruption” tagline. Their aim is to allow users to wow their customers “without fracturing day-to-day operations”. This has been welcomed by customers and partners alike.

“Avaya Experience Platform has all of the bells and whistles as the other big competitors,” explains an IT Director from the higher education sector. “What I like about Avaya Experience Platform is that they are ahead of the game in creating updates for compliance, and they are super supportive of hearing ideas about new tech.”

“The Avaya Experience Platform was utilized by one of our customers in FIS”, says a professional from an IT service provider and Avaya partner. “They use this as a contact center platform across all channels and analytics. There was an AI involved which makes it easier. You can hear everything you need and you can do Noise Removal for the conversations.”

The future is bright for Avaya

In the coming years, Avaya plans to continue their more comprehensive, unified and innovative approach. That’s highlighted by multiple new hires including a chief financial officer, chief product officer and chief marketing officer for its C-Suite.

But the response of their customers and partners in central to this. Put simply, that’s the acid test for any enterprise communications company. Fortunately, customers and partners seem to be on board according to Alan Masarek.

“It gives me a great sense of confidence that customers are responding to Avaya’s transformation and partners are responding to it,” he outlines. “I think you’re going to see very quickly Avaya restore to a net grower while delivering good financial results on the bottom line.

“The financial disruption that we had before obviously created a great deal of noise but that is well behind us now,” adds Masarek. “Our best days are absolutely in front of us.”

Surviving and thriving in the dynamic communications industry

The communications industry can be challenging, especially when the pace of change and innovation is so fast. Avaya has shown that it’s possible to keep up with this change and not just survive but thrive too. In the space of just over a year, they’ve gone from a struggling legacy provider to a modern vendor with a unique offering that stands out from the rest.

This can be a lesson not only to other communications providers, but also other businesses – including Avaya’s many customers. The keys to their survival have been resilience, strategic decision-making and adaptability. Rather than focusing on one strong point, Avaya has taken steps to cover all bases for its customers.

At Aura, we help businesses across the globe do exactly that.

As the go-to specialist for deploying and supporting Avaya globally, we can help your organization eliminate the need to manage multiple vendors, contracts and SLAs. With Aura, everything you need for your IT estate is provided under one roof. That includes connectivity, customer experience and collaboration solutions.

Want to find out more? Contact our team today.

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