Optical switch maker BrightLink Networks Inc. cut 20 employees last week, including its CFO and much of its marketing and sales force. BrightLink made the cuts to conserve cash while it prepares its product for general availability, its CEO Paul Schaller told Light Reading on Friday.

"These are tough economic times, and you have to be ready to make these kinds of changes if you need to," Schaller says.

In August, BrightLink said its BOSS 1000 STS-1 grooming switch had achieved Network Equipment Building Systems (NEBS) certification and was being tested by "two major carriers." The company first talked of its carrier trials in late April (see BrightLink Announces Lab Trials). These are big steps for a single-product startup, but they imply that significant revenue from sales might be weeks or months away (see BrightLink's Prospects Brighten ).

BrightLink has raised $113.8 million in venture funding since it began operations in 1998. Its two most recent funding rounds included a $35.8 million round in June 2001 and a $52 million round in April 2000. The company's backers include Draper Fisher Jurvetson, Goldman Sachs & Co., Menlo Ventures, and the Sprout Group.

Sources close to BrightLink say its post-money valuation (the value assigned after a company has received funds) approached $500 million in 2000, but harsh economic times drove the company to accept pre-money valuation (value before investment) in the $60 million range during its fund-raising round this summer, forcing massive dilution for previous shareholders (see Valuation Deflation in Startup Land).

In April, BrightLink cut nearly a third of its staff, with Schaller becoming CEO after the company's board ousted Harry Quackenboss. Around that time, BrightLink closed its 18,500 square-foot Texas development center.

The company's headcount has been cut in half since March and now stands at about 100.

This most recent round of layoffs claimed BrightLink's chief financial officer, Leo Quillici; its vice president of marketing, Gary Law; its vice president of human resources, Suzanne Kinner; and its vice president of software development, David Liu, Light Reading has learned.

Without delving into specifics, Schaller says BrightLink's customer trials are "going well" and its product will be available "soon."

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