One-time networking and unified communications industry stalwart Avaya has again fallen on tough times.

On Tuesday, Avaya Holdings announced that it had entered into Chapter 11 bankruptcy protection as the company aims to restructure its financial obligations. Yesterday, the New York Stock Exchange (NYSE) announced it was starting proceedings to delist Avaya Holdings common stock, which had been trading under the ticker symbol AVYA.

Avaya claims that its financial restructuring will reduce the company's debt down to approximately $800 million, which would represent a 75% reduction from the current debt load of $3.4 billion.

The move doesn't come as a complete surprise as the company warned in August that its financial results for the third quarter of 2022 were not going to meet expectations. Avaya brought in new CEO Alan Masarek in July 2022, just ahead of its earnings disclosure, in a bid to help transform the Avaya business model.

"I joined Avaya to help unlock the power of its iconic brand, global customer footprint, massive partner ecosystem, large-scale communications deployments, and outstanding team," Masarek said in a release announcing the bankruptcy filing. "Strengthening Avaya’s capital structure is a critical step to fully realize our transformation, and we are excited to move ahead as a well-capitalized company with one of the strongest balance sheets in our industry that includes substantial cash to invest in our own success.”

Avaya has followed a meandering path over its two decades of existence. The company was formed in 2000, as a spin off from Lucent Technologies, which itself had been spun off from AT&T in 1995.

For much of its history, Avaya has had a primary focus on unified communications technologies, though it also had a stretch of time where it was active in the networking space. Avaya acquired Nortel Enterprise Solutions in 2009 for $900 million, but largely exited the networking business in 2017 when it sold the business unit to Extreme Networks for $100 million.

Avaya has also gone back and forth in the public markets and financial solvency. The company was public from 2000 to 2007, when it was taken private in a $8.2 billion deal led by Silver Lake Partners and TPG Capital. In January 2017, the company declared bankruptcy for the first time and went public again at the end of year.

Over the last six years the company has focused on building out its cloud contact center and collaboration capabilities. Avaya’s current portfolio includes its Experience Platform contact center technology as well as the its Cloud Office communication and collaboration suite. Avaya has a strategic partnership with RingCentral to develop and sell the Cloud Office service.

Amalgam Insights Analyst Hyoun Park told SDxCentral that from his perspective, Avaya’s latest bankruptcy looks like the final step in cleaning up the financial mistakes of the past driven by Silver Lake and TPG.

In Park's view, Avaya missed out on one of the biggest market opportunities of this generation with the Covid-19-related acceleration of digital transformation.

"At a time when both the collaboration and contact center markets have been red-hot, Avaya [had] massive debt obligations that prevented it from executing in these areas," Park said. "Avaya serves as a stern reminder on the challenges that even strong market leaders can quickly have when saddled with debt and forced to pursue short-term goals by highly activist investors."