Net2Phone cuts staff, focuses on cable

Net2Phone Inc. today said it has embarked on a cost reduction program, including the elimination of 43% of its staff and a major reduction in outsourced services, which will save the company $23 million on an annualized basis and put it at EBITDA breakeven by July 2002.

In addition the company said it will make a strategic shift to put greater emphasis on providing IP telephony services to cable operators. As part of that effort, Net2Phone will lean on its relationship with Liberty Media, which is now part of a limited partnership with IDT and AT&T that controls 64% of the company’s voting stock.

The objective, according to Stephen Greenberg, CEO of Net2Phone, is to take advantage of what he sees as an explosion of cable IP telephony near the end of 2002.

“We would like to believe we can move that timetable up,” said Greenberg, who recently took over the CEO spot from Howie Balter, who resigned last month.

Initially, the company will focus on international second line features for cable operators but quickly will transition into second line domestic services.