Thread regarding Avaya layoffs

$AVYA Revenue Game. Recognizing Rev by Discriminatory Layoffs and Misleading Bookings to Inflate Executive Comp

The following news on IBM is parallel to AVYA via many similarities:
‼️ https://www.theregister.com/2022/04/07/ibm_securities_lawsuit/ ‼️

  1. Employees living in chronic fear of retaliation of they speak up to concerns about GAAP and other financial inconsistencies.
  2. AVYA force feeding Cloud Subscription Deals upon customers
  3. Shifting revenue recognition to appear to be signing 1400 net new clients on cloud (NOT True...those logos do NOT generate revenue). See Misleading investors from Q2 2021 Earnings Conference where they claim all 1400 logos are cloud generating revenue

https://seekingalpha.com/article/4500934-avaya-stock-cheap-tech-deleveraging-opportunity?utm_campaign=twitter_automated&utm_content=article&utm_medium=social&utm_source=twitter_automated

  1. Shifting comp plans that result in large bonuses for Executives, while the aging sales force is managed out by lack of earned comp payouts

"The Register®
Off-Prem SaaS
IBM deliberately misclassified mainframe sales to enrich execs, lawsuit claims
Lawsuit accuses Big Blue of cheating investors by shifting systems revenue to trendy cloud, mobile tech
Thomas Claburn in San Francisco
Thu 7 Apr 2022 // 00:04 UTC
82 comment bubble on white
SPECIAL REPORT IBM has been sued by investors who claim the company under former CEO Ginni Rometty propped up its stock price and deceived shareholders by moving revenues from its non-strategic mainframe business to its strategic business segments, allegedly in violation of securities regulations.

The investors' securities fraud lawsuit [PDF] was filed on Tuesday, April 5 in a southern New York federal court. It names as defendants not only IBM but current and former executives including Rometty, former CFO Martin J. Schroeter (now CEO of IBM spin-off Kyndryl), current CFO James J. Kavanaugh, and current CEO Arvind Krishna.

IBM "improperly and in violation of Generally Accepted Accounting Principles ('GAAP') embarked on a fraudulent scheme to shift billions of dollars in revenues from its mainframe line of business to its Strategic Imperatives and CAMSS line of business," the complaint reads.

According to documents seen by The Register and interviews with former IBM employees, the case stems from years of allegedly unlawful and unethical business practices that served to inflate executive bonuses through revenue shifting, discriminatory layoffs, and the manipulation of sales commission, and other means.

"This misbehavior, we're told, was rewarded by IBM's decision to tie executive compensation to sales of technologies deemed crucial to the US giant's future: ☁️ CLOUD ☁️ Analytics, Mobile, Social media, and Security, collectively referred to as CAMSS products. By transferring revenues from its systems division to trendy CAMSS initiatives, IBM's leaders would appear to be succeeding in important growth sectors and take home larger bonuses."
NOTE : AVYA CEO began his career at IBM and learned these tactics

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Post ID: @OP+1glP3pRr

9 replies (most recent on top)

If thats the case all sales account managers and immediate VPs are the ones get fired asap.

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Post ID: @1Ogtd+1glP3pRr

AUGUST 2022 And this is exactly what is going on with AVAYA! This Post was a Looking Glass to the future

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Post ID: @1Nfop+1glP3pRr

Should we be worried that they may be in legal trouble? Conversely, as an employee shareholder, should we be addressing that AVYA operates in a similar fashion as described with IBM and then we employees will be part of the shareholder action? Will they then retaliate against us like they have so many?

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Post ID: @mkku+1glP3pRr

Should we be worried that they may be in legal trouble? Conversely, as an employee shareholder, should we be addressing that AVYA operates in a similar fashion as described with IBM and then we employees will be part of the shareholder action? Will they then retaliate against us like they have so many?

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Post ID: @muak+1glP3pRr

I do worry about the bait-and-switch number playing that is going on. Are they legacy premise or are they cloud? they don't appear to create a hybrid strategy, which in turn makes it appear like they are competing with themselves.

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Post ID: @jlom+1glP3pRr

YES!
Long-term customers who maybe hadn't upgraded their systems or added any integrations or features in 2-3 years, yet sign an empty cloud subscription (because they were offered free SPACES) are not net-new Cloud logos.

What is interesting in comparing AVYA to IBM's creative "bookings" is the same "logos" that AVYA claims were net new, are also the logos that they told their Account Managers "No, you don't get paid on that cloud deal as they were an existing customer and that is just a bluebird".....
Someone needs to solicit AMs to share what deals they were denied payment on vs the "New Logos" the acc

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Post ID: @1egs+1glP3pRr

YES!
Long-term customers who maybe hadn't upgraded their systems or added any integrations or features in 2-3 years, yet sign an empty cloud subscription (because they were offered free SPACES) are not net-new Cloud logos.

What is interesting in comparing AVYA to IBM's creative "bookings" is the same "logos" that AVYA claims were net new, are also the logos that they told their Account Managers "No, you don't get paid on that cloud deal as they were an existing customer and that is just a bluebird".....
Someone needs to solicit AMs to share what deals they were denied payment on vs the "New Logos" the account for the "1400 new logos"
Fancy, convenient accounting if you ask me.

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Post ID: @1nnb+1glP3pRr

W.O.W.
This paragraph hits home for anyone who has lived the Avaya shift to Cloud Subscription :
"The complaint describes how IBM's leaders "were motivated to engage in this conduct by the bonus compensation structure they created – IBM’s AIP [Annual Incentive Program] (and other long-term incentive programs) – and their desire to drive up IBM’s stock price." And it claims they tried to ensure the bonus-boosting scheme's success by enlisting about 5,000 IBM account executives and other high-level employees into the same AIP bonus compensation plan."

"created an environment in which mainframe revenue was misclassified/reclassified as Strategic Imperatives Revenue in order to maximize the AIP and appease Wall Street’s thirst for an IBM revenue stream unrelated to its mainframe line of business,"

*AND THE MOST RELEVANT STATEMENT (THIS IS EXACTLY WHAT AVAYA SPACES IS)
""They have been convincing customers to ditch their licensing renewals/maintenance contract and buy 'new' cloud services, which the customer doesn’t have to use," our source told us at the time.

"IBM can book the ‘new’ services revenue as cloud revenue," the source claimed. "It is a quick and dirty scheme to inflate their cloud sales numbers. They are not new, they are simply gutting their software numbers."

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Post ID: @cgf+1glP3pRr

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