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Network consultancy cuts 30 percent of its staff and CEO resigns as it looks for a another round of funding
June 15, 2001
Valiant Networks Inc., a network testing and consulting firm, has cut 30 percent of its staff this week, including its CEO, Thomas J. Fitzpatrick. Fitzpatrick, a Nortel veteran, joined Valiant in July 2000.
Wayne Price, co-founder of Valiant, told Light Reading today that he has taken over the chief executive role until further notice.
Price said economic conditions and a slowdown in carrier spending had prompted the firm's actions and added that the company would still be able to service its customers just as well with its reduced ranks. "By doing this we can come closer to profitability, and that makes us more attractive to investors," Price says.
Being attractive to investors is important for Valiant now as it trolls for new funding. Valiant has raised $21 million to date from Kleiner Perkins Caufield & Byers, Matrix Partners, and Norwest Venture Partners, and it brought in $5 million in revenue during its first 12 months of business (see Valiant Tests Its Power).
A source close to the company says Valiant is seeking about $20 million for its second funding round.
At the beginning of April, Valiant announced a wave of executive appointments and boasted that instead of tightening its belt it was "bucking that trend with growing revenue and accelerated expansion." At that time it appointed John Zavoli, as chief financial officer; Randy Shipley as vice president of sales; Debbie Jo Severin as vice president of marketing; Faisal Mushtaq as vice president of network and system service; and Kevin McGowan as vice president of operations.
Light Reading has confirmed that at least one of the executives it announced in April was cut. When pressed about this, Price indicated that Valiant's executive staff was "pretty much intact" and would not elaborate further.
Price also didn't want to say how many people were affected by Valiant's staff cuts. Light Reading, after conversations with two sources close to Valiant, has determined that Valiant began the week with 137 employees and ended the week with 96.
As its business is concerned, Price says Valiant is sticking to its original plan of being both a network designer for service providers and a technical surrogate for equipment companies. "All this has to do with the slowdown in carrier spending, which has affected everyone," he says.
- Phil Harvey, Senior Editor, Light Reading
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