BBO's Bankruptcy and Bounced Checks
BroadBand Office Inc. (BBO) employees are hopping mad -- and with good reason. According to several reports from former BBO workers, the company has bounced some of the final paychecks it issued last week after filing for Chapter 11 bankruptcy protection and laying off most of its workforce (see BBO Files for Bankruptcy Protection).
“Not only did they not pay bonuses, commissions, vacation pay, or severance, but now they are not even paying their employees salary for the last few weeks of work,” reads one email from an ex-BBO employee. “They are screwing all of us again, and again and again.”
Broadband Office officials were not available for comment. Last week, Rachelle Chong, general counsel for BBO, told Light Reading that it would not offer severance, but that it would pay employees through last Friday as well as pay them for vacation time.
- Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com
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optical
12/4/2012 | 8:24:29 PM
re: BBO's Bankruptcy and Bounced Checks 12/4/2012 | 8:24:29 PM
This is really sad for our industry. Cisco did the right thing in how they treated their folks during their recent downsizing.
optical_1
12/4/2012 | 8:24:28 PM
re: BBO's Bankruptcy and Bounced Checks 12/4/2012 | 8:24:28 PM
with the recent layoffs in startups, better
to work for cisco than other startups. In the
recent layoff, cisco gave 6 months pay + 1 yr
vesting for all the employees who were let go.
While startups are giving max 1 month pay and
some options which are worthless.
Any other comments ??
Dredgie
12/4/2012 | 8:24:28 PM
re: BBO's Bankruptcy and Bounced Checks 12/4/2012 | 8:24:28 PM
Sad but True GǪ
Welcome to the old-world-order. Start-ups = Risk. ThatGÇÖs the game GÇô Its just been forgotten the exuberance of the previous 2-years. What do you expect: High salary, a boatload of options, job stability AND 6-months severance if it goes bad. Advice for the prospective GÇ£entrepreneurGÇ¥: If you donGÇÖt like it, stay at your WCOM job.
justcurious
12/4/2012 | 8:24:17 PM
re: BBO's Bankruptcy and Bounced Checks 12/4/2012 | 8:24:17 PM
"don't overlook the mess Cisco executive management created-i see relatively few negative articles regarding Chambers and his cohorts who blew 2.5 billion dollars".
Some comments on this :
1. I guess Cisco's PR machine is doing excellent job. There was a time everybody from the brokers to trade press to CNBC was calling Cisco the wonder company of the age, a can't-miss investment and most of American growth funds have Cisco as one of the core holdings because "We're the only company that can control our own destiny". Nobody wants to admit their mistakes and blindly hope or believe Chambers's words that "we're going back to 30% to 50% growth again".
2. Using words like"A hundred-year flood..in your lifetime", Chambers tried to hide the structural problems and told the public that Cisco was a victim of macroeconomics problem (that's true)not its business model. Hiding behind the recession might buys the company some time to change direction.
3. One of Chambers's mistakes was his famous statement of "voice would be free" alienating many Old World carriers (especially ILECs)and infuriating competitors(Lucent, Nortel). His tone was almost as if he felt sorry for them as dinosaurs heading for extinction soon. VOIP won't replace voice technology overnight. Coming from the data side, he naively underestimated the importance of the embedded carriers and the economic reality of voice/circuit switching technologies (while 80% of traffic might be data, 80% of revenues still comes from voice). Show service providers the profit source that will replace it. The old dinosaurs of Baby Bells lived for a hell of a long time and have the last laugh now and the bad news is,as Paul Sagawa said,"The larger,established carriers tend to view Cisco skeptically. By no means do they view Cisco as a partner"
We're forgotten the problems with Internet profitability and ignored the question of how a market segment that isn't making money can continue to spend it on new equipment. Cisco, and the industry, needs to back not a technology but a revenue paradigm-one that's real and not just hoped for. The Internet isn't it
More_LightReading_Junk
12/4/2012 | 8:24:17 PM
re: BBO's Bankruptcy and Bounced Checks 12/4/2012 | 8:24:17 PM
Correction. Cisco gave 6 months pay - correct. Cisco did not give 1 year accelerated vesting. Cisco is allowing 1 year to exercise any options that were underwater when you were laid off - many which are granted in the $70 range. It's unlikely that many of these people will see 1 red cent from those worthless options that were exchanged for 6 day work weeks and long, long hours.
Any options which were in the money are still subject to the original option agreement, most which will need to be exercised within 3 months or less. Most of these people have seen a tremendous loss in wealth in these options and are now forced to exercise them at a relative low price after years of hard work - thanks Cisco.
By the way, don't over look the mess Cisco executive management created - i see relatively few negative articles regarding Chambers and his cohorts who blew 2.5 billion dollars. Haven't heard one of these execs take it on the chin yet and admit they screwed up. They rationalize it with them taking "calculated" risks that is part of the Cisco culture. Well, if it wasn't for the calculated risks, thousands of employees would still be working there. Just my opinion..
ranon
12/4/2012 | 8:24:09 PM
re: BBO's Bankruptcy and Bounced Checks 12/4/2012 | 8:24:09 PM
>> Well, if it wasn't for the calculated risks, thousands of employees would still be working there.
A correction here. If it wasn't for the calculated risks, thousands of employees would NOT be working there.
They would have left for faster growing startups.
You must realise one thing that two years before the bust the number of jobs increased 300% (or more). They have dropped recently by say 30 %, which still leaves us with a growth of 100%. Still pretty impressive eh.
Also it was almost impossible for the managers to predict when the bust would occour, even though they might have known it was coming. So that is why people were hired at the rate they were.
We guys should knew that this was a high risk industry when we joined. So we should not blame the management.
ranon
cessna
12/4/2012 | 8:24:08 PM
re: BBO's Bankruptcy and Bounced Checks 12/4/2012 | 8:24:08 PM
If BBO owns majority of Zephion shares - wouldn't the bankruptcy court go after them also. I heard that VC are reluctant to fund Zephion because of this connection - given that they run out of money this week maybe they are going to fold also. I just hope they do it much more professionally than Dan Chu and crew at BBO
More_LightReading_Junk
12/4/2012 | 8:24:07 PM
re: BBO's Bankruptcy and Bounced Checks 12/4/2012 | 8:24:07 PM
Ranon,
There's nothing worse then hearing the same old "you can't blame management". WRONG. You're ignorant to the facts and fall prey to Cisco's propaganda. Management messed up big time at Cisco. They messed up with doubling the work force over the last year and then ramping up inventory in the face of a KNOWN bubble which would have to burst. Many, many people at Cisco weren't "busy" - Cisco was fat, sloppy, lazy. The excessive hiring binge was idiotic and done so middle managers could build there little empires. This was middle management working AGAINST executive management and is STILL going on there. I guess upper management didn't know a bubble was about to burst? What about the 3 top level executives that left over the last year? Don't tell me that is normal - it is not at Cisco. Try backing up your statement.
If you keep trying to spread the word (propaganda) that management couldn't know this or that - I will keep spreading the word what a mess Cisco management is and state facts/examples so eveyone knows the truth at Cisco. Don't bring you're Cisco homer crap here Ranon.
lighthearted
12/4/2012 | 8:24:03 PM
re: BBO's Bankruptcy and Bounced Checks 12/4/2012 | 8:24:03 PM
agreed!! $2.5 billion in inventory write-downs is inexcusable; and, no, it wasn't necessary to continue growth. if fact, cisco still has nearly $500 million in excess inventory if management is serious about returning to 7.5x turns. when companies double order from vendors to tie up supply they end up wasting excess capacity and, ultimately, creating the cause of their own downfall. a few mea culpas would be very appropriate.
but remember, we are talking about a company that claimed it would be the first to reach $1 trillion in market cap. hubris and humulity don't often mix.
spanky
12/4/2012 | 8:23:59 PM
re: BBO's Bankruptcy and Bounced Checks 12/4/2012 | 8:23:59 PM
And let us not forget the Cisco sales force, true arrgance at it finest!! Let it be a lesson learned, the big kid on the block gets knocked down, sooner or later!!
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