Enterprise tech distie Avnet Technology Solutions is back in cost cutting mode amid fears that flakey demand for “legacy” tech will continue.
The firm reported an 8.3 per cent decline in sales of $2.13bn for Q3 of fiscal ’16 ended 2 April, this was down 6.9 per cent in constant currency.
The top line was at the “low-end of expectations as all three regions experienced weaker than expected demand and select areas of legacy data centre products,” said CFO Kevin Moriarty.
He said networking and tech services came good for the distributor but this was offset by “decline in storage, servers and software”.
The distributor put a brave face on the numbers, talking up investments in flash and converged infrastructure, which grew 40 per cent and 20 per cent respectively to an unknown dollar figure.
But it admitted that “given the March results” and the “decline in certain legacy data centre products” the cost structure needed to be rationalised.
“We have initiated expense reduction that will reduce annual expenses by approximately $25m,” said Moriarty. The CFO said the cuts pertain to people in areas of “underperformance”. ®