Global distributor ScanSource remains committed to its European communications business despite a recent restructuring drive, according to its European boss.
ScanSource announced last week that it had hacked back headcount across ScanSource Communications Europe – which focuses on Avaya, ShoreTel, Extreme and LifeSize – to ensure the scale of its operations fitted with its "present sales opportunities".
The US-based firm's barcode and electronic point-of-sale business is unaffected.
CRN understands the majority of the cuts – which are designed to save ScanSource $3.1m (£2m) annually – came not in the UK but in Germany, where the distributor has apparently been struggling to hit its numbers. ScanSource as a whole expects to report Q1 sales of $672m to $682m, down on the $708m logged last year and also its previous guidance.
Talking to CRN, Buck Baker, interim president of ScanSource Europe, said the European comms business needed to rein in costs following its acquisitions of UK outfit MTV Telecom and German Algol in 2007 and 2009 respectively.
"We did not have the business metrics in place to support the size of the business we had," he added.
"When I came over in January to head up the operations [for both the barcode and comms businesses], I realised we needed to make some changes to comms and this was not something that we could let linger any longer."
A new European MD role, which is to be filled by Rudy De Meirsman, was created to ensure someone is steering the overall business as ScanSource already has for its barcode operations, said Baker.
He confirmed the cuts had been deeper in Germany but refused to give numbers, citing compassion for those involved. The UK sales efforts will continue to be led by Kim Jennings, while Paul Emery has been promoted from technical manager to technical director. Both will report to De Meirsman. Sales and business development headcount stands at about 60 across the region following the changes. Some accounting functions have been centralised to the US.
ScanSource Communications' European business revolves around the UK, Germany, France and Benelux and Baker stressed that the firm is committed to each of these core markets, and may even consider expanding further afield with vendor backing.
"ScanSource is still committed to comms in Europe just as we are to the barcode business, it's just we needed to make some changes, as unpleasant as they were. There is no de-commitment from vendors – we want to continue to grow those guys and be even more successful with them.
"Even though these economies are not great, they are probably the strongest in Europe. We will take a hard look at [new regions] but have to do it hand in hand with vendors."
Baker said he was surprised and disappointed to see Avnet exiting the UC market in the UK but agreed that it is becoming tougher to make money from the technology.
"People may think I'm nuts but I am a firm advocate that competition is good if it's the right competition," he said. "It keeps you on your toes and I hate to see Avnet moving out. The cost structure is higher to support a UC strategy versus other products and it is complicated, especially now when you add video into it.
"Most resellers are telling us their customers are looking for one provider to do voice, video and data infrastructure and it is a big investment for them as they tend to be smaller [than distributors] – that is what I'm more concerned about. That's where we have the technical expertise to help them with the design, especially if they are looking to tack on video."
View pictures of all of last night's fights
Acquisitive comms provider swoops on Frontier Voice & Data and StoneHouse Logic
Cybersecurity firm rakes in £3.6m for unwanted unit
Results, reaction and pictures from last night's CRN Fight Night