Voxware cuts staff, changes focus
The Internet telephony company quietly lays off 20 percent of its staff in an effort to refocus its product strategy.
The company cut 16 people from its payroll in the past week, after deciding to drop its consumer Internet phone products. Voxware will focus on selling its technology to third parties that will integrate the technology into their products.
"We're reducing sales, marketing and communications, and product-development positions relating to certain products ending their life cycle," Voxware chief financial officer Kenny Traub said. "We never got the consumer-end business off the ground."
The layoffs come during a period when Internet telephony offers intriguing cost savings. The technology is saddled with quality problems, however, as well as concerns that the budding service will be regulated by the federal government as it threatens to cut into the traditional telephone market.
The flagship Voxphone product no longer will be sold to consumers, but the company's underlying audio-compression technologies will be offered to third parties to integrate into more comprehensive audio and video conferencing products. Voxware previously has licensed software to Microsoft, Oracle, IBM, Natural Microsystems, and others.
The encroachment of Netscape and Microsoft into the Internet telephony and conferencing software business--and their ability to give their products away for free or nearly free--convinced Voxware to shift gears, according to Traub.
"It has led us to an OEM-focused business model. It's an orientation that requires strict discipline on cost control," he said.
When asked if Voxware was for sale, Traub said there was "no active program" to sell the company.
Voxware today posted a net loss of $900,000, or 7 cents a share, for the quarter ending December 31, 1997. Revenues for the quarter totaled $1.9 million. Despite the red ink, those numbers compare favorably to the year-ago quarter, in which total revenues were $1.5 million and the net loss was $2.4 million, or 21 cents a share.