Jasmine Networks: Disconnected

The startup founded in 1999 put all its eggs in the Nortel basket and got burned

February 1, 2002

2 Min Read
Jasmine Networks:  Disconnected

Jasmine Networks, one of many startups in the crowded metro optical switching market, has officially closed its doors, say sources. The company has been struggling to stay afloat for almost a year and just yesterday bid the last of its employees good-bye.

Calls placed to David Robert, chief operating office and acting CEO, and to David Frazee, vice president of legal affairs and corporate secretary, were met with messages saying that their phone lines had been disconnected. While the company’s Website is still up, its corporate phone number only reaches voice mail.

According to a source close to the company, the remaining 50 employees in the company’s San Jose, Calif., office were told yesterday that the company would be closing. Their last official day was yesterday. The source also says that employees were given little to no severance. Rumors had been circulating since October that Jasmine’s days were numbered (see Rumors Rampant as Startup Woes Mount).

In March, Light Reading reported that the company had slashed its workforce by roughly 25 percent, leaving about 180 employees (see Is the Bloom off Jasmine?). It had also closed its Richardson, Texas, facility and sent Venkata V. Chalam, vice president of engineering, and Ravi Dattatreya, chief executive officer, packing.

Sources say that Jasmine’s demise results from a deal gone bad with Nortel Networks Corp. (NYSE/Toronto: NT). Back in the summer of 2000, Nortel had agreed to resell the Jasmine product. So Jasmine altered its product focus and concentrated on building an OC48/OC192 multiplexer to fit into the optical transport product portfolio Nortel had acquired from Qtera. A year later, when Jasmine finally got its product to market, Nortel found itself in deep financial trouble and cut the deal.

Without any other customers on board to take up the slack, the company hasn’t generated any revenue or been able to raise new funding.

— Marguerite Reardon, Senior Editor, Light Reading

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