CUseeMe Networks Reduces Staff

CUseeMe Networks (www.cuseeme.com) announced that it has laid off 26 employees and eliminated 10 additional positions that were open due to attrition in the ordinary course of business. The elimination of these 36 positions will result in a 22 percent total reduction in the company's workforce. Many of the positions eliminated were in the areas of marketing and general support.

The company also announced plans to consolidate its resources at its facilities in Nashua, New Hampshire and LaGaude, France, while consolidating the company's service operations center and two satellite offices into its Nashua-based headquarters. The company expects that the reorganization will result in savings of approximately $2.5 million a year, but will cost about $500,000 in severance pay and lease termination fees.

Bob Scott, COO of CUseeMe, remained positive stating, " Market indicators point toward significant growth in the areas of IP-based voice and video communications over the next two to three years."

The fact that CUseeMe has cut its staff is largely indicative of the general market atmosphere, but it may not bode well for the several companies that have indicated recently that they are looking towards an ASP model to generate additional revenue. CUseeMe adapted an ASP component in May.