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Optical/IP

BrightLink, White Rock Cut Jobs

Job cut update: BrightLink Networks Inc. and White Rock Networks have each endured a round of recent layoffs, Light Reading has learned. The frequent staff cutting by telecom startups comes despite small signs of stabilization in the U.S. economy and assurance from the Bureau of Labor Statistics (BLS) that U.S. unemployment may have peaked.

About the only thing both venture-backed companies have in common is that neither company has publicly announced a long-term carrier contract to date.

BrightLink, the core optical switch maker, fired 27 people on March 16, according to a source close the company who spoke on the condition of anonymity. Employees were told that the layoffs came as a condition of BrightLink's investors, who were about to supply the company with a $2 million bridge loan so it could maintain operations.

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.

The company's headcount stood at about 100 as of October 2001 (see BrightLink Cuts to the Bone). Executives for BrightLink, through a spokesperson, refused to comment on the layoffs.

White Rock Networks, maker of a "stackable" multiservice provisioning platform (MSPP), confirmed that it cut about 60 people, roughly 30 percent of its staff, last Wednesday. The company gave those cut a "small severance" and pay for unused vacation time, according to Andrew Knott, White Rock's VP of marketing.

The layoffs were companywide, with the slightest cuts coming in engineering and customer service, Knott says. The cuts haven't substantially set back White Rock's OC192 product, which should be in general availability in July, he says.

"The reasons for this are obvious -- we want to stretch out our cash as far as possible," he says.

White Rock Networks raised some $60 million last year, which brought its total funding to about $102 million (see White Rock Feeds on More Funding).

The company claims it has shipped to some unnamed carrier customers for revenues. Knott says it has also booked revenues via its relationship with Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) (see Tellabs Takes a New Tack).

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com
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optical 12/4/2012 | 10:41:15 PM
re: BrightLink, White Rock Cut Jobs So does this mean that if a company has work force reductions, they are toast? I guess Ciena, Fujitsu, Lucent, Nortel, Alcatel and even the mighty Cisco are done then!
wbe 12/4/2012 | 10:41:15 PM
re: BrightLink, White Rock Cut Jobs This is the second round of layoff at white rock. The previous round went un-noticed in mid 2001 when the company secretly cut 10% of its workforce. Does'nt look good.
wbe 12/4/2012 | 10:41:14 PM
re: BrightLink, White Rock Cut Jobs So does this mean that if a company has work force reductions, they are toast? I guess Ciena, Fujitsu, Lucent, Nortel, Alcatel and even the mighty Cisco are done then!
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You are trying to compare apples and oranges. What does it tell you about a company which has little or no revenue and had to lay people off to conserve cash?
internetspeed 12/4/2012 | 10:41:13 PM
re: BrightLink, White Rock Cut Jobs
I do not understand why these telecom startups shutdown their operations and let the industry recover faster. Layoffs, Removing management is only a stop gap remedy. The cancer is incurable.
rudolf_cheney 12/4/2012 | 10:41:12 PM
re: BrightLink, White Rock Cut Jobs
I hear the company is in big shit. No customer
traction. Huge expensive layer 2 ethernet switch. Whoever has heard of an expensive huge L2 switch. When the industry is designing smaller and cheaper ethernet switches, this company went and designed a humongous, expensive L2 switch.

They fired all their founders, the CTO included. Rumors are rife that USVP is soon going to replace their CEO (PK) with one of their partners. What a waste of money, the company has raised 150 million till date.
optical 12/4/2012 | 10:41:10 PM
re: BrightLink, White Rock Cut Jobs that they are doing the prudent thing to conserve their cash. something that alot of other startups should have been doing. I'm not in the know as to White Rock's revenue stream but i do hear very good things about their products especially their OC-192 platform that is due out this summer. Amazing footprint, densities and price points. Unlike some, I'm pulling for these start ups to make so I won't have to deal with the old recylced technology of the Nortel's and Fujtisu's anymore.
cruiser 12/4/2012 | 10:41:09 PM
re: BrightLink, White Rock Cut Jobs good point optical. i have some folks in startups around the valley and in boston who are personal friends, and they're all in equipment startups or at csco, jnpr, one of the public companies. everyone is worried right now. no one is safe in this market and you know, no one should be safe. even healthy companies generally turn over about 10-15% of staff per year voluntary and involuntary in good and bad markets. that brightlink and white rock are paring back vs. spending the money only to shut the doors in a few months may actually be a sign that things are going ok. if brightlink and white rock had no prospects the investors would reclaim their money and shutter the companies now vs watch their investments crater. also smart companies are using the downturn as an excuse to fire all the losers they were forced to hire when the bubble was expanding. now they are cleaning house and using the suddenly loose labor market to hire good people.

like you, i'm pulling for startups but i'm also pulling for the big companies too because if anyone, anyone at all, can find success in this market we all win.
wbe 12/4/2012 | 10:41:08 PM
re: BrightLink, White Rock Cut Jobs I'm not in the know as to White Rock's revenue stream but i do hear very good things about their products especially their OC-192 platform that is due out this summer.
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hmm. you sure you do'nt work for them?
internetspeed 12/4/2012 | 10:41:08 PM
re: BrightLink, White Rock Cut Jobs

Does anybody know what product this company developed with $150M. Or did they spend the money on big parties, signon bonuses and executive perks !!!

What is the product of this startup ? Is it an optical, DWDM, MPLS, Multiservice, router ATM switch !!!
soulman 12/4/2012 | 10:41:07 PM
re: BrightLink, White Rock Cut Jobs There is nothing fancy about their products. It will be very hard for them to get customers in these downturns. Customers mostly will look for end to end solutions. Goodbye Whiterock!.
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