March Networks Corp., which announced Wednesday it is scrapping plans to merge with Mitel Networks, laid off 15 per cent of its staff late Thursday afternoon.
The Ottawa-based Internet-protocol applications developer said most of the 47 job cuts were based in that city, although Toronto employees were affected as well, said company spokeswoman Sarah Dehler.
She added that the layoffs had nothing to do with the decision not to merge the two companies.
“The two are two separate activities,” Dehler said. “The strategic alliance that we have chosen to take is one that both companies is the best move at this time. That was announced yesterday and the layoffs announced today are not unlike a number of companies around the world, where they are interested in cost cutting measures in the new economic climate that we are in.”
Layoffs were “across the company” Dehler said, including at Toronto-based new media company Infoprenuer, which March acquired in the spring.
“I know the majority of the 47 were here in Ottawa, but I am not sure of the exact number in Toronto,” she said.
Earlier reports show two key divisions of the company were poised not to achieve sales targets for the year.
Mark Quigley, research director at Yankee Group Canada in Kanata, Ont. said this round of layoffs is symptomatic of what is happening in the market. He said he believed March’s claims that the layoffs were not associated with the announcement that the two companies would not merge.
“It’s no surprise, I guess,” he said. “It seems to me that there were some legal issues that prevented them merging. The same person (Terrance Matthews) owns them both, so it would have to be a legal reason for them not to merge. If they were intent on laying a bunch of people off, merging is always a good way to do that.”
Quigley said it would be difficult to blame just one sector of the company because everything has been hit with hard times. He added that because this company is owned by Matthews alone, it would not see the difficult situation of having to keep shareholders happy at the end of the day.
“At the end of it, no one is immune to what has happened in the last nine months and March Network is no exception,” he said. “It is a sign of economic slowdown, that they are simply not making numbers. I don’t think you could attribute it to anything more than that. Matthews has a grand vision of where both companies are heading and that is not changing and I think this is simply a sign of economic times.”
March Networks in Ottawa is at http://www.marchnetworks.ca
Mitel Networks in Ottawa is at http://www.mitel.com
Yankee Group Canada in Kanata, Ont. is at http://www.yankeegroup.com