Alidian Lays Off Again

Alidian Networks Inc., which makes metro aggregation and transport systems, has laid off another 20 employees and picked up a new, potential customer in recent weeks. The company, like most telecom equipment startups, is having to cut costs everywhere it can without hurting its ability to sell to and support carrier customers.

"Part of the reason we did this layoff is so we could keep the doors open," says Robert M. Lefkowits, Alidian's vice president of marketing. Lefkowits says that Alidian now employs more than 140 people. Alidian's last announced layoff was in June when it let go 55 of its 220 employees (see Alidian Lays Off 25%).

Also leaving Alidian recently was hardware engineer Phil Kruzinski, who joins Luminous Networks Inc. this week as its new director of hardware engineering. Another recent personnel change at Alidian involves founder Dave Newman, who hasn't left Alidian, but has taken on the role of venture partner with Charles River Ventures.

Alidian CEO Bart Shigemura is rumored to be mulling a job change, sources close to Alidian say. It's not clear whether he is leaning toward changing jobs or just backing away from Alidian, but company insiders wonder about the content of a recent lunch Shigemura had in Mountain View, Calif., with former Alidian operations boss Al Sadler. Sadler now works with Routescience, a networking device startup (see RouteScience Unveils Routing Scheme). Alidian officials dismiss the rumors surrounding Shigemura. "If he's out looking or plans to step down, it's news to me," says Lefkowits.

The company is also looking for funding these days, after having raised about $100 million since its founding in 1998. "We think we'll be successful in raising some amount [of money] before the end of the year through strategic partners rather than venture capitalists," says Lefkowits. He adds that investors now are doing more due diligence for a small investment than the auditors of his previous employers did before those companies went public.

What will help Alidian's finances is a new equipment deployment the company has made in the Dallas Fort Worth area. Competitive local exchange carrier IP Communications has begun using Alidian's products in its network, Lefkowits says.

"We're taking their voice and DSLAM traffic from the different COs [central offices] that they're operating in and backhauling it over fiber to their switching centers and hub sites," he explains.

IP Communications competes regionally with SBC Communications Inc. (NYSE: SBC), the incumbent carrier from which it leases central office capacity.

Lefkowits won't say how large the deal between the two companies might be. Although there is a plan for IP Communications to roll services out to several Texas cities, he's not sure what the schedule is for doing so.

"It is a nice steady annuity, but we wish we could sell more gear right away," he says. "A year and a half ago, it was build it and they will come. Now it's, 'If you find [customers], we'll eventually find a way to build it for them.'"

Alidian has other equipment deployment with The Korea Internet Neutral Exchange Center (KINX) and Aevia, a Walnut Creek, Calif.-based CLEC. The company also has a reseller agreement with Optisphere Networks Inc. (see Optisphere, Alidian Team Up).

- Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com