The word on the street is that approximately 50 people (see update) were laid off at Cantata yesterday out of a workforce of 300. Most of the people who were let go are shocked. Sources tell me the reason for the layoffs are soft sales numbers and some speculate the company is facing increased competition in its Excel Switching line. Apparently competitors are providing lower cost solutions. In addition others believe the company has not fully promoted the new Cantata brand which has much less awareness than the decade and a half old Brooktrout name and the very well-known Excel name.

 

This news comes at a time when speculation exists that Dialogic will take share back from many in the media processing space.

 

Update

 

According to Peter Vescuso the VP of Marketing at Cantata Technology:

 

There is a longer term plan in place at the company to offshore development. Many of the people who will be let go will stay on with the company for some time. Cantata is looking to increase its competitiveness by hiring people in other areas of the world. In some cases where costs are lower and in other cases where it makes sense strategically to hire people. In other words closer to the customers.

 

This means the number 50 I quoted above is not entirely accurate as many of these jobs will be replaced. The company would not give an exact number of people let go.

 

I was present when Greg Galitzine asked Peter what the effect of these moves will be on customers. Peter said this is good news for partners and customers as the company will have better products longer term and they will be able to serve them much better as well.

 

In response the Dialogic mention above Peter said the opposite is true as Cantata has benefited from the Eicon/Dialogic integration and have gained some customers they were unlikely to get if the company was still under Intel’s umbrella. They plan on making an announcement about this news soon.