EQO Communications, a communications company based in Vancouver that made waves at Demo 2006 and raised a total of $13 million in two rounds of funding from GrowthWorks, BDC Capital and Ventures West is rumored to have cut nearly 65% of its work force — reducing the number of employees from 35 to 12. The news was reported by Techvibes, a Canadian startup related publication. I have called their marketing manager for a comment but had not heard back at press time.

When it launched, we were intrigued by EQO because it was one of the first clients out there that allowed you to make Skype calls from a regular phone. Making Skype mobile was an opportunity that slipped away from EQO mostly because competitor iSkoot was better funded and had a better execution strategy. In August 2006, EQO got into a bit of a tiff with Skype. The company then refocused on social networks but it seems even that strategy didn’t go anywhere. The company raised another $9 million in August 2007.

Funny thing about these rumored job cuts is that the company has been supporting more and more mobile phones and was supporting all high growth devices. The job cuts, if true, don’t bode well for the long term health of the company. VoIP as an industry has proved to be hard nut to crack for start-ups, especially those aiming for the consumer market. Jangl and TalkPlus were two startups that hit the deck earlier this year. We are going to see more of these”save money on LD” phone apps with no discernible business model and relatively little traction or loyalty to follow suit. 

* Approximately