Shiva has finally ended weeks of speculation after it signed an agreement with Nortel which signalled the closure of its Edinburgh office and the loss of 125 jobs.
As exclusively revealed in PC Dealer (15 April), the struggling vendor's plans include an attempt to sell off the Scottish branch, previously Spider Systems, acquired by Shiva in 1995 for $80 million.
Phillip Crocker, marketing director at Shiva, admitted the vendor had been involved in talks with Nortel over a buyout but said: 'We have strengthened our OEM agreement with the company, we have to become profitable.'
The majority of redundancies will be based in carrier engineering at the Edinburgh branch, along with some marketing and field support jobs, the latter of which will be supported in Europe.
Crocker said: 'Nortel has been paying for a lot of the engineers in Scotland where we were developing a product for telcos, so the engineers fates were tied to this.'
He asserted that Shiva would return to the corporate market in a bid to increase profits which since 1996 have failed to materialise.
Crocker said: 'The OEM relationship with Nortel means it will buy products from Shiva over the next eight to 11 quarters which will mean $5 million each time. We are also expecting $12 million in services rendered.'
In February, the vendor axed 12 sales jobs a week after reporting a $37.9 million loss for its Q4 results ended 3 January. Crocker said: 'We have not been profitable for two years. In the next results we are hoping to break even - shareholders want us making money.'
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