Video networking company VDOnet, facing a firestorm of competitors with deeper pockets, today said its layoffs of more than 20 percent of its workforce has led to the abrupt resignation of its president and chief executive officer.
Marty Falaro, who joined VDOnet earlier this year as president and CEO, has left the company as a result of its decision to restructure. He will be replaced by Asaf Mohr, the company's chairman and founder.
Mohr said it will be increasingly difficult for VDOnet to compete in the video streaming market given Microsoft's (MSFT) stake in two of the company's competitors. Microsoft recently invested in RealNetworks, formerly Progressive Networks, and acquired VXtreme, two of VDOnet's direct competitors.
VDOnet, which in the past few months has been broadening its offerings to include complete video solutions for the premium service provider market, will now refocus its efforts on its baseline OEM (original equipment manufacturer) products, core technologies, and the support of its major customers, such as NTT, Gilat Satellite Networks, US Robotics, and others.
The privately held company, founded in 1995, also will turn its attention to developing various video networking applications for OEM markets. These applications will combine VDOnet's VDOPhone software video conferencing technology and VDOLive video broadcasting technology.
In order to remain viable in the highly competitive market, VDOnet decided to cut back from spending heavily on marketing, primarily in its Boston office.
The Boston office will layoff about 20 employees, Mohr said, noting that other layoffs will follow at other locations. The company has 95 employees worldwide.
The Boston office was founded earlier this year with the specific intention of developing the premium service provider market and marketing directly to operators. However, the company said it found that this market is not immediate and requires major resources and funding.
The company decided this week that it needed to refocus its strategy on core competency in the video networking area. That means it would sell its products to OEM partners rather than in the open market.
"The ultimate goal is to reach profitability very quickly, and we see it around the corner," Mohr said, noting that the cutbacks are designed to help achieve that goal.