Vonage CEO resigns, cost-cutting moves planned
Vonage Holdings CEO Michael Snyder resigned, the company said Thursday, at the same time announcing moves to cut costs.
Snyder resigned, and also quit the company’s board of directors, Wednesday. Chairman and Chief Strategist Jeffrey A. Citron will fill in as CEO until a replacement is found.
The company announced plans to cut its costs by $140 million, including $110 million in unnecessary marketing expenses, in order to become more competitive.
Vonage may soon be able to cut back on customer recruitment costs: on Friday it won a temporary reprieve from a court order prohibiting it from signing up new customers as a result of a patent dispute with Verizon Communications Inc., but that order may be reinstated at a hearing on April 24. Vonage spends $275 on marketing for each new customer signed up, it said.
The VOIP (voice over Internet Protocol) operator also plans to freeze staff recruitment, and to lay off 10 percent of its workforce during the second quarter, cutting costs by a further $20 million.
The company expects to report revenue for the first quarter of $195 million and 322,000 new customers signed up during the quarter. Allowing for departing customers, it expects to report a net gain of 166,000 subscribers. The company has around 2.4 million subscriber lines, bringing it an average monthly revenue per line of $28.17, it said.
Editor’s note: Due to a reporting error it was incorrectly noted that Vonage was prohibited from signing up new customers; that has been corrected.