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ICANN slashes staff and domain prices could rise

Kevin Murphy, May 30, 2024, 21:22:41 (UTC), Domain Policy

ICANN has laid off 33 people, about 7% of its 485 staff, and has raised the specter of increased domain name prices, as it struggles to balance its budget.

The job losses are effective today and come “across all functional areas and regions”, acting CEO Sally Costerton wrote.

The Org said this evening that it made the decision to lose the employees as part of a broader cost-cutting effort that it hopes will help close a $10 million hole in its budget. At the end of April, it had said it was looking for $8 million in savings.

Costerton said ICANN will also look at reducing travel expenses and doing more work from its cheaper regional offices, as well as finding other efficiencies.

But it is also “evaluating ICANN’s fee structure to ensure it scales realistically with inflation”, Costeron wrote.

This will be of great interest to domain registrants, particularly those on a tight budget or with large portfolios, as any increases in the transaction fees ICANN charges registries and registrars will inevitably be passed on to their customers.

Registrars currently add a $0.18 per-domain-per-year ICANN fee at their checkouts, and registries pay $0.25 for every add-year, renew-year and transfer. The fees have not changed in at least the 15 years I’ve been writing this blog.

For ICANN community members and the domain name industry, the cuts will selfishly beg the questions of which services ICANN provides could suffer as a result, and whether it means delays to already overdue projects such as the new gTLD program.

The budget shortfall has arisen due to inflation and sluggish domain sales from the likes of Verisign, ICANN’s biggest funding source. Verisign’s outlook for the year is pretty bearish, with a low estimate of a 1.75% decline in domains under management.

I believe it’s the first time ICANN has been forced into a mass layoff, having reliably swollen its ranks almost every year until quite recently.

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Comments (1)

  1. Paul Twomey says:
    November 4, 2024 at 2:49 am

    Kevin,
    When the first agreements were put in place with registrars in the first 1-2 years of ICANN, the ICANN fee was a 25 cents fee per domain under management at a set time in the year. This caused discontent with NSI as it was the monopolist losing registrations to other registrars as the market shifted (but paying at the higher level at the beginning of the period).
    Further, the registrars considered it was a fee coming from their bottom line. When I became the CEO in 2003, I helped conclude a process Louis Touton and Stuart Lynn already had started to shift the fee structure to a per registration fee and to be clear to the registrars that they could pass the fee to the purchaser of the domain name. The fee remained at 25 cents. As the ICANN revenues (and reserves) became closer to what the Board finance committee and the full Board considered prudent and close to steady state (especially considering the costs incurred with litigation with Verisign in 2003-05), we took several steps to reduce the fee to 18 cents (about 2007). I appreciated the good leadership and advice of Hagen Hultzsch, the then chair of the finance committee, who both pushed hard for efficiencies within ICANN and positioning the need for sustainable finances.
    I hope this is useful.
    Paul

    Reply

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