Avaya swings the job axe

NEWS Communications equipment manufacturer Avaya is planning to cut employee numbers and sell off almost 10 per cent of its business. The cost-saving announcements come as the company lowered its predicted sales outlook for the second quarter of 2002. Avaya is getting rid of 1,900 staff members from a workforce of 23,000, which will lead to savings of between $180m and $200m each year. The company will also sell a minority eight per cent stake to Warburg Pincus Equity Partners, giving Warburg a 15.5 per cent total stake. Shares in Avaya went down 28 cents or 4.47 per cent following the announcement yesterday morning on the New York Stock Exchange and the company is being downgraded to the lowest ratings available by Moody's and Standard & Poor's. Shares hit a low of $5.67 for the day after a $6.35 high and closed on 11 March at $5.95.