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Employment

Astral Point Lays Off 20%

CHELMSFORD, Mass. -- Astral Point Communications, Inc., a provider of optical networking equipment used in metropolitan markets, said today it has reduced its headcount by 45 people at its Chelmsford, MA facility as it focuses on delivering applications that are most needed by its major customers and prospects.

"Astral Point has not been immune from the slowdown in the telecommunications industry. By taking this difficult action now to control expenses and focus our resources on the needs of major carriers, we are ensuring the long-term success of the company," said Raj Shanmugaraj, founder, president and chief executive officer of Astral Point.

Astral Point Communications Inc.
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yomama 12/4/2012 | 8:31:48 PM
re: Astral Point Lays Off 20% I agree with you, I don't think all of these guys are going to make it, around here in the 495 belt of Mass, there are just too many startups, of course they are not all the same telco space, just the same, it's just that the market place will not be able to support all of them...when you hear company's looking for more than 3 rounds of financing it's like the kiss of death in this day and age...My prediction of the next bad news:

Ennovate Networks....just my two cents....
light_me 12/4/2012 | 8:31:48 PM
re: Astral Point Lays Off 20%
Let's take a quick browse through memory lane..., and recall all the MSPP startups that have recently announced layoffs:

Mayan
Astral Point
Zaffire

I'm sure there are others, but I just can't think of more right now. All things considered, are these companies DOA? I don't want to be presumptuous or wish ill-will on any of them, but the prognosis certainly doesn't look good.

Who is next? What about LuxN, Alidian, Geyser, Quantum Bridge, and the host of others in this market space? Surely, not all of them are going to make it.
silent mariner 12/4/2012 | 8:31:47 PM
re: Astral Point Lays Off 20% From what I was told, the bid never hit the dotted line. Those layed off can't feel great if only because other start-ups are also freezing or cutting back and the big companies are all doing the same in grander scale.

Ennovate, Ellacoya, Tenor, etc. appear to be facing the same music. Appian could make the list but they have not over hired to the same extent.
silent mariner 12/4/2012 | 8:31:47 PM
re: Astral Point Lays Off 20% I believe that Geyser already announced layoffs. though I do not have complete insight into the company, this looks more like fat cutting and capital preservation than the beginning of the end for the comapny. These guys also don't appear to marketing themselves as a pure MSPP play but more as an aggregator or DAX. eom
sinclair 12/4/2012 | 8:31:47 PM
re: Astral Point Lays Off 20% And to think they had a 1.3 billion bid from Alcatel......I wonder how those layed off feel
bluey 12/4/2012 | 8:31:45 PM
re: Astral Point Lays Off 20% According to someone who posted to Boston.com's Digital Dirt page (www.digitalmass.com), Ennovate laid off a bunch of people a few weeks ago. A couple of years ago there was an article in the Glob about how the VP of Eng or some such person took everyone out to brew beer, and instead of calling the result an IPA (india pale ale), it was called IPO. Those were the days my friend....
light_me 12/4/2012 | 8:31:45 PM
re: Astral Point Lays Off 20%
Hi Yomama,

I partially agree with you regarding the "kiss of death" regarding 4th round funding. It seems like an omminous sign. I would like to point out a few counter observations though:

1) With the equity markets(IPO) pretty closed right now for startups, most companies don't have a choice but to go for a 4th round of funding - if they can get it - THAT'S the problem. If market conditions were different, you wouldn't be seeing these companies dilute and go for a 4th round. Their 4th rounds would be an IPO. But with the IPO market shut..., well, you get the picture. It's an endless loop.

2) I know of one startup, not in the optical space, that just closed a 4th round of funding($60M). Perhaps the most compelling reason why they got the funding is that they have SALES.

3) This leads me to my last point; namely, that those optical startups that can show sales will be able to get funding and perhaps survive. Sales is the key. But now that the major telcos have cut CAPEX spending, these startups will have a hard time generating sales. Again, it seems like a viscous cicle.

Light_me
Titanic Optics 12/4/2012 | 8:31:44 PM
re: Astral Point Lays Off 20% Astral Point and it's ilk always marketed themselves as more than SONET, i.e. the ability to pack multiple protocols on a single wavelength. (Alidian, Metro-Optix and a few others come to mind here.)

As to metro and access players, look for PON-oriented Quantum Bridge to fail to get its IPO out, and then to have a layoff. I don't know why they are waiting to do this. Probably because the CEO is very arrogant and delusional. There are better PON companies out there anyway.
bluey 12/4/2012 | 8:31:44 PM
re: Astral Point Lays Off 20% I found the article:

http://digitalmass.boston.com/...

silent mariner 12/4/2012 | 8:31:38 PM
re: Astral Point Lays Off 20% It does not look like Astralpoint needs a 4th round any time soon... They are likely hoping that the markets are a bit more frinedly next year.
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