Thursday, April 12, 2007

Vonage CEO Gone.... Announces Massive Cost-Cutting, Firings

If you've been paying attention at all to the numerous posts here with warnings about Vonage...this should come as no surprise. If you are shocked than shame on can't say I didn't warn you.

"It's a company on the last vestiges of life support," says Leo Hindery, telecom kingmaker at InterMedia.

Vonage's CEO resigned today, quickly followed by an announcement from company officials that major cost-cutting measures and at least 10% of the company's workers are going to be out of a job in the coming days. Jeffrey Citron is now the interim CEO

Vonage workers have been updating their resumes for days, and today's announcement only heightens the concern that Vonage will be out of business sooner rather than later.

"They are running out of money," said Hindery, explaining the probable real reason for the cost cutting and firings.

Vonage continues its efforts to convince the public and its customers that it is a viable company, but customers are defecting anyway, with an uptick in churn rates. Vonage suspects they won't be attracting a whole lot of new customers either -- much of their cost cutting will be directed at their marketing campaigns to attract new customers.

I can hear it now, customer service - you suck, operations - you suck, marketing - you suck, development - you suck, I want them all gone by midnight. Not going to be pretty in NJ over the next few days/weeks.

In the end don't expect anything to get better operationally with all management covering their !@@ and trying to cut each other's throats to save their own, JC not willing to cut his sub performing friends, and JC forcing engineering to implement a half baked solution in a futile attempt to get away from the proposed infringements.

Sadly focus may be pulled from winning the patent infringement battle. Shame on our system to allow such crap to be granted a patent. Nothing was truly invented here and our court system needs to have the guts to stand up and say so.

For those who haven't left Vonage yet you better make a decision soon...or you risk going down with the ship. If you've been looking at Vonage for broadband phone service.....look elsewhere. I suggest Packet8 and SunRocket as viable options.

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