Maple Turns Over a New Leaf

A week after a $40 million funding round, the company lays off workers and cancels a product

September 6, 2001

3 Min Read
Maple Turns Over a New Leaf

Maple Optical Systems was flying high two weeks ago when it closed a $40 million round of funding, bringing the total amount of money raised close to $100 million (see Maple Nabs New Funding).

But now the company seems to be tightening its belt, letting go of roughly 12 percent of its workforce and cancelling plans for its all-optical switch.

Sources close to the company say that 22 of Maple’s 180 workers were laid off last Thursday, August 30, 2001, just before the Labor Day holiday in the U.S. Included in the layoffs were some director-level and senior engineering people from various departments, including sales, operations, marketing communications, information technology, and optical development. Light Reading has confirmed with the company that Emma Rugge-Price, director of marketing communications, and Chris Dolan, director of finance, both left the company last week.

One source speculates that Rugge-Price’s departure is linked to comments she made to Light Reading two weeks ago regarding the close of the company’s third round of funding, when she commented that the round hadn’t actually closed yet (see Maple Nabs New Funding).

There have also been rumors circulating that at least 11 ASIC engineers have recently left; whether or not they were a part of the layoffs is still uncertain. Sources also say that the startup has had trouble with its ASIC developments due to design flaws and isn’t expected to complete work on them until sometime next year. This could delay deployment of the company’s flagship MPLS core switch, the ML3200.

But Atiq Raza, founder of Raza Foundries, one of Maple’s original investors, insists that's not true.

“There are absolutely no problems with the ASICs, and in fact they are ahead of schedule,” he says. “The ASICs are doing great!”

He did confirm that the company has stopped development of its ML8000 all-optical switch.

“We decided that we can get it from other companies,” says Raza. “We are focusing our energy on the ML3200. It’s similar to a computer company saying: Are we going to build the disk drives for our system ourselves or outsource that?”

Shelving development of the ML8000 will likely not affect the company too much, since most of the intellectual property of the company is tied up in the ML3200 product, says an analyst who didn’t want to be named. But some analysts are still skeptical about the MPLS core switch/router market, since other startups like Tenor Networks Inc. have struggled to raise capital and win contracts. What’s more, core routing companies like Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR) are starting to roll out MPLS in their routing products, making the need for additional boxes focused on MPLS less obvious to service providers.

“The market is a bit sketchy right now regarding pure MPLS switch/routers,” says the above-mentioned analyst. “Also, Maple has BGP peering on the box with OC192 interfaces, and that's a big undertaking.”

Maple Networks did not return phone calls by press time.

— Marguerite Reardon, Senior Editor, Light Reading

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like