VocalTec announces layoffs, restructuring

IP telephony vendor VocalTec today announced it would eliminate a third of its workforce and revamp its management team in an effort to streamline the company.

VocalTec said it would eliminate 70 positions, most of them in Israel, bringing its employee total to 149. In addition, VocalTec will cut back severely on Research and Development and is saying goodbye to Chief Operating Officer Ira Palti, leaving CEO Elon Ganor to handle the daily operations of the company.

“In this environment, we must manage our resources very carefully,” Ganor said in a statement. “We will continue our development of next-gen packet telephony solutions, but we will be more selective about the projects we pursue.”

Ganor said the cuts will eliminated quarterly operating expenses by 41% and lower its revenue targets to $6.8 million per quarter. The restructuring will put a $2.5 million to $3.2 million charge on VocalTec’s quarterly earnings. Of that total, $600 million to $900 million will represent write offs of inventory and equipment depreciation.

VocalTec expects revenues for the third quarter to be approximately $3 billion and with the restructuring charge to post a loss of 62 cents to 69 cents a share.