With the cable industry consolidating around it, CableLabs is seeking to restructure itself by shifting its focus to longer-term research projects and reportedly laying off at least 30 of its employees.
As first reported by Multichannel News late Friday, CableLabs is carrying out the restructuring and cutbacks to focus more on pursuing longer-term "innovation projects" and "funding game-changing innovations." While the cable industry R&D organization has not said how many of its 180-plus people are being laid off, CableLabs CEO Phil McKinney did indicate to Multichannel News that some staffers will be leaving. But he insisted that the MSO-backed organization's overall budget has not been cut.
With today being a national holiday in the US, CableLabs spokespeople did not respond to inquiries about the restructuring and layoffs before this story went to press.
In a Friday blog post on the CableLabs site, entitled CableLabs 2.0, McKinney explained that it's time for the organization to "significantly increase" its funding for innovation now that it's completed its global expansion. Under his leadership, CableLabs has taken on a worldwide focus over the last three and a half years, folding in the former Cable Europe Labs group and recruiting cable operators from multiple continents. The organization now boasts 55 MSO members covering 180 million video subscribers in 33 nations, up from 38 MSO members covering 81 million video subs in 17 countries when McKinney took over in June 2012.
McKinney also said it's time for CableLabs to shift its emphasis now that it has recruited fresh "top talent" and established "a solid foundation" for "taking on an aggressive innovation role for the industry." He cited the organization's new ability to accelerate such key industry projects as the new DOCSIS 3.1 spec, WiFi spectrum, SDN/NFV, LTE-U and advanced network architectures. (See CableLabs Certifies First D3.1 Modems.)
"The transformation we are announcing today involves prioritizing the investment in innovation projects focused on three to eight years as being of equal importance to our traditional R&D projects focused on one to three years," McKinney wrote. "These longer range innovations will become the source for the R&D projects of the future. While most organizations spend a small portion of their budget on longer range innovation, we've made the deliberate decision to be aggressive in this transformation to ensure that CableLabs can rapidly build and sustain a significant innovation pipeline for the industry."
McKinney did not indicate in his blog which research areas would see cutbacks and which would see increases in funding. But, in an interview Sunday, he told Multichannel News that he plans to step up funding in virtual reality, next-gen video technologies and cable's role in healthcare technologies, among other things.
The restructuring moves by CableLabs come as the cable industry is undergoing a fresh wave of consolidation, with a number of major merger deals pending. These include Charter Communications Inc. 's proposed buyouts of Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks , Altice 's proposed purchase of Cablevision Systems Corp. (NYSE: CVC) and recently consummated acquisition of Suddenlink Communications and Liberty Global Inc. (Nasdaq: LBTY)'s proposed takeover of Cable & Wireless Communications . Such consolidation could lead to lower membership revenue for CableLabs and raise fresh questions about its role in the industry.
Light Reading CEO and Founder Steve Saunders recently interviewed McKinney about CableLabs' priorities going forward. Stay tuned for that interview on our site.
— Alan Breznick, Cable/Video Practice Leader, Light Reading