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Net2Phone to lay off nearly 300

The Net telephone service provider says its new cost-cutting plan will save it millions and that it will be "aggressive" with controlling expenditures.

Internet telephone service provider Net2Phone announced a cost-cutting plan Wednesday that includes the reduction of its staff by 43 percent, or nearly 300 employees.

The layoffs will reduce the Newark, N.J.-based company from about 675 employees to 385 employees and will require it to take an $8 million charge in its first fiscal quarter to account for office closures, severance payments and consolidation.

As the company moves forward, "we will be just as aggressive with controlling capital expenditures and other cash outlays as we have been in controlling operating expenses," CEO Stephen Greenberg said in a statement.

The company, which sells hardware and software that lets people make telephone calls over the Internet, plans to post break-even earnings in July 2002, excluding items from interest, taxes, depreciation and amortization (EBITDA). Net2Phone said it expects to save $23 million a year through the cuts.

Net2Phone added that it will reduce costs further through scraping unprofitable businesses and cutting redundancies across divisions. The company will also focus its research and development on improving its technology that lets people make calls through their cable modems and other broadband devices.

IDT recently acquired voting control of Net2Phone through the formation of a limited liability company by IDT, Liberty Media and AT&T. IDT controls the limited liability company, which holds a 64 percent stake in Net2Phone.