LAN Systems retrenches 10 staff

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Distributor LAN Systems has retrenched 10 staff or 10 percent of its local workforce following a reduction in revenue this quarter.

The cuts were made “across the board” after a 10 percent decline in local revenues caused primarily by Cisco's decision in February to employ a sales model whereby its top Gold reseller partners could buy direct from the vendor at the same buy price that they would through distributors like LAN Systems.

Nick Verykios, MD at LAN Systems, said a lot of the distributor's [Cisco] business had disappeared now that the Cisco Golds were going direct. He added that three or four other vendors had also pulled out “some resources” from the distributor.

As a result, Verykios said LAN had to adjust its business to get the correct cost structure. LAN now has 90 staff following the retrenchments.


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