Vonage Canada workers could be on the chopping block

As it considers chopping a number of staff positions, VoIP service provider Vonage Holdings Corp. might not spare its Canadian workers from the block, says one industry observer.Jon Arnold, a telecom analyst in Toronto, figures all options are on the table - including a complete shutdown of Vonage Canada's customer service operations. "They may even just close shop," he says.It could spell an end to what Vonage Canada representatives have described as a unique entity within the overall corporation. During a February interview, Vonage Canada CEO Bill Rainey said his organization tried to do something different, by hiring well-educated customer service representatives and tapping their creativity to improve the company."If we could make this a really cool place to work, where people loved coming to work, and our partners saw us as not just vendors, think what that means to the customers. That's what we've done. We've built what we think is a very unique culture with talented, motivated people. It's starting to gain traction as a differentiator in the marketplace."That Vonage Canada runs its own customer service team and doesn't rely on US representatives has attracted attention. "Bill's had a fair degree of autonomy," says Mark Goldberg, a telecom consultant, speaking of Rainey. The consultant says he expected Vonage Canada to lean on the US. But it makes sense for a company to create local cultural affinity. "I was impressed," Goldberg says.Rainey couldn't be reached for comment about the current situation, however. A Vonage Canada spokesman says all questions are being funneled into the US corporate communication team, which couldn't be reached before deadline.On April 11, Vonage CEO Michael Snyder stepped down and founder Jeffrey Citron stepped back into the position. The move accompanied preliminary financial results that said Vonage attracted 166,000 net new subscribers during the first three months of 2007. But the report also said the company would chop its marketing budget by US$110 million, and cut some jobs. In a conference call, Citron said Vonage plans to merge its US and Canadian operations "into one global team."In March Vonage was found guilty of infringing three Verizon Communications Inc. patents for connecting the VoIP service to the public-switched telephone network (PSTN). The trial judge ordered Vonage to stop signing up new customers, but the company is appealing the verdict, and has successfully argued for a stay of injunction during the appeal process.If the injunction is lifted and Vonage is no longer allowed to sell services south of the border, Canadian sales would probably continue, says Michael Geist, a law professor at the University of Ottawa. "Presumably the court order would be limited to the United States and Vonage would not face any such restrictions in Canada."

Vonage Canada workers could be on the chopping block

News | April 13, 2007

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