Rumor: Zenith Infotech Layoffs, Staff Cuts?

Zenith Infotech has cut sales, marketing and technology support staff, sources say. If the rumored layoffs are true, this is the latest potential setback in the cloud-oriented backup and storage markets, where services like Symantec Backup Exec.Cloud and Nirvanix have been shutting down and/or moving to exit the highly competitive industry.

Zenith Infotech — a backup, disaster recovery (BDR) and private cloud company — has been trying to negotiate a debt default settlement for more than two years, while also striving to maintain its existing MSP partner relationships.

A Zenith Infotech spokesperson declined to comment about the alleged staff cuts. MSPmentor has reached out to CEO Akash Saraf for comment but has not heard back.

Looking Back and Ahead

Zenith Infotech was an early pioneer in the MSP solutions market — promoting RMM (remote monitoring and management), NOC (network operations center) and BDR (backup and disaster recovery) solutions across the managed services industry.

But Zenith Infotech hit turbulence in 2011, defaulting on a bond payment around the time the company sold off its NOC and RMM business to Summit Partners. Over the past year or two, Zenith Infotech has been striving to solidfy its BDR business while also launching and expanding private cloud solutions for MSPs. And more recently, the company has been working to negotiate a debt settlement with bond holders while fighting off a potential company liquidation.

In November 2013, MSPmentor began hearing rumors about Zenith Infotech staff cuts. And earlier this week, MSPmentor heard from a range of sources who say the cuts potentially involve six U.S. employees, and 25 or more employees abroad. MSPmentor has not been able to confirm the rumors, nor has MSPmentor received a comment from the company.

Alternative Options

A lengthy list of cloud-focused backup and disaster recovery companies continues to serve MSPs. Many of those companies have introduced migration incentives for MSPs that want to exit Symantec Backup Exec.Cloud and Zenith Infotech.