ICANN is forced to take tough measures in the face of budget shortfalls. According acting ICANN CEO Sally Costerton, the Corporation is laying off 33 employees, which is 7% of the corporation's total staff. Costerton added that in the current economic climate, such measures are being used across all industries and around the world. ICANN has to do this because of a budget deficit of about $10 million. Other measures designed to improve the financial situation include reducing travel expenses and redistributing workloads in order to make more active use of regional offices, which are cheaper to maintain.
However, ICANN may not stop there. Sally Costerton noted that the Corporation is currently studying the compliance of the received contributions with the level of inflation. ICANN currently receives 18 cents annually from each domain name managed by all registrars and 25 cents per transaction (registration, renewal, or domain name transfer) from all registries. It only makes sense that the main source of royalties is the company Verisign, which manages .COM, and the fact that it has been recording a decrease in the number of registrations for several quarters in a row could not but have a very negative impact on ICANN's financial position.
If a review of the amount of deductions does take place, then registries and registrars will automatically shift the burden to their customers. The price increase may be most sensitive for two categories of registrants. The first is individuals and legal entities whose financial capabilities are quite limited, the second is holders of large domain portfolios. Representatives of the domain community are also concerned about the fact that the corporation's employees are being laid off. They fear that staff reductions could slow down work on ICANN's ongoing projects, including preparation for the next phase of the new domains program.
Kevin Murphy, the author of the Domain Incite, is also concerned. In reporting this news, he notes that he has been writing about the domain industry for 15 years. And in all this time, there has not been a single instance when ICANN announced a reduction in staff or a planned increase in royalties.
