Quarterly results are missed quarter after quarter, so regardless of the virus, Extreme was going to miss targets/expectations anyway. There’s always an excuse. Tariffs, supply chain, mergers, growing pains etc.
(4/15 11:30am- day after layoffs) Stocks are down 9% even after a 12% reduction in force (that’s what investors think of EXTR). Now everyone is working with fewer resources. Inside sales, Business Development and GTAC are all struggling, Sales Engineers are supporting multiple account managers, territories are too large to be proactive, managers have 10+ reports.
There hasn’t been any focus on the wired business since the Aerohive acquisition, 7/2019. It’s all on wireless. Extreme is ignoring the core business and if the wireless revenue/subscription models don’t ramp up soon, there’s going to be more trouble. Aerohive wireless is barely selling – at least to new customers.
Though I feel it’s a better solution, the wireless subscription model is grossly overpriced, and the customers are noticing. See last bullet.
Senior management is now bringing in Cisco Management and sales reps, hoping to fix the problem. Extreme Networks doesn’t have two distinct advantages that Cisco has; brand recognition and a functioning partner program. We’ll see how they do.
Sales pipelines are grossly exaggerated at the direction of management and sales operations, to keep upper management off their backs, or maybe to “cook the books”.
The only rational for the RIF’s is lower operating costs for a quick sale, Dell is always the rumor. The way the stock is trending, perhaps it will be a good deal in the months to come.