HOLMDEL, N.J., April 12 (UPI) -- U.S. Internet phone carrier Vonage Holdings Corp. Thursday said its chief executive had stepped down and it would lay off workers in a cost-cutting move.
Michael Snyder, 54, who was also on the Vonage board, was replaced temporarily by founder and Chairman Jeffrey Citron while the company searches for a permanent successor, Vonage said in a statement.
Vonage did not say why Snyder resigned. Citron stepped aside as chief executive before the start-up went public last year.
The Holmdel, N.J., voice-over-Internet-protocol phone service provider was found guilty March 8 of violating Verizon Communications Inc. patents, including technology that lets Internet calls connect to ordinary phone lines.
A jury said Vonage must pay $58 million in penalties plus 5 1/2 percent royalties on future sales for continuing infringement.
The company is also banned from signing up new customers, although a federal appeals court has scheduled a hearing to let Vonage argue the ban should be overturned.
In its announcement, Vonage said it would save $30 million by shrinking its 1,800-person workforce by 10 percent, implementing a hiring freeze and cutting general and administrative expenses.
It will also reduce marketing costs by $110 million, from $420 million down to $310 million, this year.
News of the management change and cost cutting sent Vonage shares up 6.67 percent, or 20 cents, to $3.20 on the New York Stock Exchange.
