Pacnet has lifted the curtain on the next stage of its existence with a new strategic plan. They're refocusing their business while streamlining operations, the latter of which will be a painful workforce reduction that will save $30M annually while seeing headcount reduced by as much as 30%.
Pacnet's soap opera this year saw Bill Barney unexpectedly fired as CEO back in May during acquisition talks with Indonesia's PT Telkom. That deal eventually fell through completely, after which Pacnet brought in former XO chief Carl Grivner to take the helm. The reserved Grivner is in many ways the stylistic opposite of the bombastic Barney, and hence it's been rather quiet at Pacnet lately.
The plan going forward is to a) refocus exclusively on carrier and enterprise customers, b) boost managed services, c) expand in China, and d) streamline operations while making room for more value-added services.
Beefing up the management team as the rest of the company braces for those layoffs, Grivner is bringing in Rackspace's Jim Fagan as President of Managed Services, Xtera's Andy Lumsden as CTO, and Earthlink's Cardi Prinzi as CTO, President of Enterprise Markets.
The layoffs are not unexpected though, as something had to give. It was certain that Grivner would make some sort of move, and his options weren't numerous. The submarine cable business in the Pacific hasn't been easy lately, and Pacnet's inability to find a suitor earlier this year had both internal and external roots.
Some may see today's restructuring as a renewed effort to make the company more attractive for potential suitors, as the company's private equity owners are likely ready to move on if they can. That being said, you generally do the same sort of things to improve your business that you would do to try to sell it, so who knows.
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