Avaya Appoints CEO As Giancarlo Becomes Chairman

Kevin Kennedy, currently CEO of communications manufacturer JDSU (formerly JDS Uniphase), will step in next January.

J. Nicholas Hoover

October 31, 2008

2 Min Read
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After a tumultuous few years of leadership, Avaya has decided to make another change. Kevin Kennedy, currently CEO of communications manufacturer JDSU (formerly JDS Uniphase), will step in next January to replace respected former Cisco Systems executive and current interim Avaya CEO Charles Giancarlo, who will become the company's chairman.

Avaya gets an industry vet in Kennedy. Before JDSU, he was chief operating officer of messaging software company Openwave, a senior VP at Cisco, and a longtime employee at AT&T Bell Laboratories. He's also a member of the board of directors at Polycom and microchip manufacturing equipment company KLA-Tencor, but it's unclear whether he'll continue in those roles when he joins Avaya, which competes in some segments with Polycom.

On an earnings call with investors earlier this week, Kennedy called his move to Avaya a "unique opportunity presenting itself." Giancarlo and Kennedy worked together at Cisco, so they may come to the job with some camaraderie. "Kevin Kennedy brings to Avaya a deep understanding of the enterprise communications industry and extensive senior management experience," Giancarlo said in an Avaya statement.

Under Kennedy's five-year tenure at JDSU, the company went from declining revenue and negative operating margins to increasing revenue and growing margins. However, JDSU has struggled in recent months. Earlier this week, the company announced it had missed earnings expectations in its most recent quarter, while losses more than doubled. It also announced a round of layoffs and site closings and expected sales more than 9% lower than previous estimates in the next quarter. JDSU stock is down 64% in the last year alone.

For his part, Giancarlo was long seen as a potential successor to Cisco CEO John Chambers, but left the company for equity firm Silver Lake partners when it became clear he wouldn't be taking over the company anytime soon. Silver Lake and TPG Capital acquired Avaya in 2007, taking the company private to overhaul the business.

Giancarlo himself took over as interim CEO for Louis D'Ambrosio only in June as D'Ambrosio surprisingly stepped down, citing serious health reasons. Under D'Ambrosio's tenure, Avaya sought to remake itself from a telecom company into a strong player in voice over IP and more recently unified communications, though earlier this year it went through two rounds of layoffs.

About the Author(s)

J. Nicholas Hoover

Senior Editor, InformationWeek Government

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