US firm Avaya ramps up nearshoring in Mexico, Argentina

US customer experience and contact center company Avaya plans to expand its specialized workforce in Mexico and Argentina this year to strengthen its nearshoring capabilities, Galib Karim, senior global VP for Latin America, told BNamericas.

In the past two months, Avaya opened around 150 positions in these countries. It could surpass the mark of 1,000 professionals providing services to other geographies from the region within 18 months, according to Karim.

Avaya has around 9,000 customers using its products in Latin America, mostly small and mid-sized enterprises, and around 800 direct employees. The go-to-market, including sales and installation, is mainly handled by distributors, channels and resellers.

Mexico and Argentina are Avaya's two main centers of excellence – hubs of services and support – in Latin America. 

In Brazil, from where it also provides support, operations are focused on solutions and software development, involving some 50 professionals.

“Mexico and Argentina will grow the most regarding centers of excellence, but not necessarily to support Latin America. Mexico is servicing the US a lot and Argentina has a global outlook. Brazil is more expensive, from a labor point of view, compared to these other countries,” said Karim during a visit to São Paulo.

DATACENTERS

The company intends to cease regional datacenter investments and use third-party sites.

Avaya's most recent Latin American datacenters were launched last year, in Querétaro and Monterrey, and have now four very large anchor customers, Karim said.

The company will now use the data infrastructure of Microsoft, its main public cloud partner, and, to a lesser extent, of AWS, Google Cloud and Oracle Cloud. 

All these groups have been investing in expanding their regional data infrastructure.

“We are no longer going to set up our own datacenters. There is good supply of datacenters in Latin America, so we are trying to partner with more providers of these structures,” said the executive.

Avaya has a close relationship with Microsoft and is beginning to expand more with Azure, using the cloud architecture in Brazil and in a few months in Mexico, according to Karim.

TURNAROUND

Avaya also seeks to “turn the page” on its financial woes, CEO Alan Masarek told reporters in São Paulo. 

In six years, Avaya has filed twice for chapter 11 bankruptcy protection in the US. 

Masarek joined the company in August last year, after serving as Vonage CEO for six years, to carry out an operational transformation and reset product and go-to-market strategies to center them on cloud, he said.

In February, Avaya filed for chapter 11 for the second time and secured a financing of US$780mn to restructure the business. 

Around US$628mn comprised debtor-in-possession financing, including a US$500mn new-money term loan from the investor group led by Apollo Global Management and Brigade Capital Management. Another US$128mn came from an ABL facility from a bank syndicate led by Citi Group.

On the occasion, the company said that the financing would help reduce its debt by over 75%, from US$3.4bn to some US$800mn. Avaya added that resources would accelerate investments in its cloud communications portfolio.

“I’ve been in communications for a long time and I enjoy these transformational journeys for companies. We are now exceptionally well-capitalized and we are profitable,” said Masarek.