In an announcement after the market closed, Avaya said Peterson, 56, will be replaced immediately by 42-year-old Louis D'Ambrosio as president and chief executive. Michael Thurk, 53, will become the company's chief operating officer.
D'Ambrosio had been senior vice president and president of global sales and marketing, while Thurk was senior vice president and president of the company's global communications unit.
The executive reshuffling came on a day when the maker of business phone systems posted sharply lower third-quarter results, as higher costs cut into profits. Shares of Avaya, which had closed slightly higher in regular trading, fell 7 percent in after-hours trading.
D'Ambrosio said he and Thurk plan to confer with the top 100 Avaya managers in the next couple of days to go over the company's strategic focus and how to execute its business plan.