The Nov. 2024 Fitch report concluded Avaya's liquidation value is $540M, based on a 5.5x multiple of $128M EBITDA.
Further, Fitch estimates a 10% yearly decline in revenues moving forward.
Assuming the current owners want a competitive return on their $628M investment in made 2023, how many more layoffs can we expect?
Some quick back of the envelope math:
To increase the liquidation value Avaya to roughly a $1B target that the current owners need, they need to increase EBITDA this year by about $100M, to roughly $200M.
To do that in the face of 10% declining revenues, Avaya needs to decrease spending by roughly $200M this year. If Avaya saves $100k/employee on average for each layoff, to save $200M this year, they will need to layoff 2,000 employees in 2025, and if the revenue declines continue on the current trend probably another1,000 in 2026.