VoIP Systems

Cedar Point Dials Back

Cedar Point Communications Inc. has undergone layoffs as it turns to outside help for its growth, executives confirmed Thursday.

Sources say the company laid off at least 20 employees in the latest round and had cut about 10 percent of its workforce in August 2007.

Chief financial officer Donald Halsted would not provide any hard numbers but confirmed that some staffers were laid off last week and last August.

A tipster on the Light Reading message board suggested Wednesday that the VOIP equipment vendor had recently laid off 25 workers, and that followed an earlier round of pink slips last fall.

"I view [the cuts] as being relatively minor reductions that had to do with an alignment of our resources for the changes [in Cedar Point's business strategy] and a reduction in the overall spending," Halsted says, noting that Cedar Point today has more than 180 employees. "It's still a very sizable organization."

But it's clear that some changes are in store for Cedar Point, maker of the Safari C3, a platform that integrates elements such as a softswitch and media gateway.

Much of that change is being driven by Cedar Point's expansion beyond North American cable, its most predominant market. Another factor is the movement of carriers toward IP networks and architectures such as the IP Multimedia Subsystem (IMS), according to just-named CEO John (J.C.) Murphy. (See Dialing for Deals? and Cedar Point Promotes Murphy.)

When it comes to service application development, Cedar Point has decided partnerships will be faster than building new products on its own. Murphy says his company is down to two potential partners, identifying a broader list including IBM Corp. (NYSE: IBM), Oracle Corp. (Nasdaq: ORCL), and Avaya Inc. .

Cedar Point is also going to lean on OEM system integrators to help it gain more international footholds. Although the vendor has operations running in Central Europe with operators such as NetCologne of Germany, it has not done much in Eastern Europe, the Middle East, and Africa. "We're finding these opportunities... but our ability to execute them in a cost-effective manner was limited," Murphy says.

Because Cedar Point is private, the company does not share revenue figures. The company, which has raised about $85 million, reportedly generated revenues of $68.1 million in 2006. So far, it has shipped more than 5 million ports. Shipments in 2007 and 2006 were flat as Cedar Point began to shift its customer mix.

But is Cedar Point seeing a slowdown from its customer roster, which includes MSOs Comcast Corp. (Nasdaq: CMCSA, CMCSK), Charter Communications Inc. , Bresnan Communications LLC , and RCN Corp. ? Halsted said Cedar Point still has good relationships with its partners but acknowledges that the economic situation worldwide brings "uncertainties" that mean customers "are not going to make any more capital investments than they absolutely have to."

Before Cedar Point began to alter its course about a year ago, the company was considered a strong IPO candidate. Well before that, it was hounded by rumors that it was a coveted acquisition target, with Motorola Inc. (NYSE: MOT) the prime candidate.

For now, it appears that neither option -- IPO or sale -- is on the near-term horizon.

"We're structuring all of our plans and activities to maximize the value of Cedar Point as an entity. We're not trying to tune to one particular outcome or another," Halsted says.

— Jeff Baumgartner, Site Editor, Cable Digital News

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