Unify, a joint venture between Siemens and the Gores Group, will cut 50% of its staff and refocus its product roster away from hardware, following a shift in the overall unified communications market toward software and cloud services.

The company, which announced the massive restructuring yesterday, and said it would also boost its channel strategy to work better with reseller partners.

Unify, formerly called Siemens Enterprise Communications, will shrink its workforce from 7,700 to about 3,900 - half of the eliminated jobs will be from Central Europe. The company will also close offices as it consolidates sites.

The company said the reorganisation is needed because the unified communications market has undergone "dramatic shifts" away from hardware-based systems and toward software and cloud based products, leading to "pricing pressure".

"Unify must transform in order to remain competitive, so we are taking these necessary and very difficult steps in order to position Unify to fully respond to the needs of our customers and the marketplace," Dean Douglas, Unify CEO.

Just last week, IDC released the results of its first quarter report on the global video conferencing and telepresence hardware market, where revenue fell 16% year on year, and units sold fell 6.2%.

The drop, according to IDC, was attributable in large part to an increase in cloud and software-based options that often are cheaper and simpler to deploy.

The top three vendors in the market - Cisco, Polycom and Huawei - all have had declines in videconferencing revenue in their recent results. Cisco's videoconferencing revenue fell 22.4%, Polycom's dropped 8.4% and Huawei's was down 2%.