Netgear Lays Off Some Of Its Channel Team

David Soares, senior vice president of sales and support at the Santa Clara, Calif.-based networking equipment vendor, confirmed that several employees in charge of partner field sales were let go last week as part of a restructuring of the partner team.

Soares said Netgear plans to rely more heavily on inside sales to recruit smaller VARs, the "sweet spot" of the channel for Netgear, which sells primarily in the SMB space.

"We feel we have a great opportunity with the VAR channel, and our strategy is to recruit many more small VARs," Soares said. "To do that cost-effectively, we need to do that on the phone so we have more contacts per employee per day."

The Netgear PowerShift Partner Program will remain intact under Director of Distribution Channel Mike Stetter, who will take over the VAR channel as well.

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Netgear also will rely on its distributors, which include Tech Data and D&H Distributing, to help it recruit more VARs, Soares said.

Partners had mixed reactions to the changes. Chaim Lowenstein, CTO of Web Commerce (WebCom), a $60-million-a-year VAR in Brooklyn, N.Y., said everyone at his company was "shell-shocked" because Netgear has been so "rah-rah" about its channel efforts. Now, he said he is concerned about the future of the Netgear channel program, in which to date WebCom has invested close to $20,000 of time and resources.

Don McKay, vice president of Redmond, Wash.-based VAR Alden Associates, said the changes would affect about 20 percent of his company's sales and could result in deals going to competitors such as D-Link Systems that retain channel sales reps. "If our salespeople take someone else [on the call], that's where the business is going to go," he said.