CompanyÂs CEO steps downHOMDEL = Michael snyder, CEO of Vonage Holdings Corp., resigned last week, an apparent casualty of the Internet phone companyÂs mounting legal and financial troubles. Replacing him on an acting basis was Vonage founder Jeffrey Citron.
The resignation appeared to be the latest fallout from a federal court decision in Virginia last month that ordered Vonage to pay $59.6 million to Verizon Communications Inc. for patent infringement. The ruling spurred a judge to bar Vonage from signing up new customers, a restriction that an appellate court swiftly stayed. Meanwhile, Vonage says it will appeal last monthÂs Virginia verdict.
Vonage is also battling a class-action lawsuit filed on behalf of disgruntled shareholders, who bought the companyÂs stock when it went public last May, only to see it drop 13 percent the same day and subsequently lose more than 80 percent of its initial value. Vonage shares traded around $3 last week.
The company, which last year lost $286 million on revenue of $607 million, last week announced plans for $30 million of staff reductions and other cutbacks. The company is also cutting about $110 million from its $420 million marketing budget.
Vonage was a pioneer of the low-cost Internet telephony market, but the companyÂs early success attracted much larger rivals.
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