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Crunch Time at Tachion

Light Reading
News Analysis
Light Reading
6/19/2001
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Last week Tachion Networks fired most of its staff as its efforts to secure a fourth round of funding have not panned out. The firm has cut 169 jobs, according to officials at the New Jersey Department of Labor, whose representatives were on hand during the layoffs to assist those let go with enrolling in training programs and applying for unemployment benefits.

The company also appears to have told employees in a letter that it's shutting down -- although an official spokeswoman now says that such information was a miscommunication.

The telecommunications equipment maker won't confirm how many people it let go, only that it has "about a hundred" people still on staff, according to Tachion spokewoman Liza Kurtz.

Tachion gave its fired employees a letter, a copy of which was obtained by Light Reading. The letter, dated June 14, states that Tachion's efforts to land a fourth round of funding "have failed to come to fruition." The letter notifies employees that they will be paid through July 6 and they'll also be paid for earned, unused time off.

The letter also states that Tachion itself is shutting down. "Effective today, Tachion Networks, Inc. will shut down all of its operations," the letter states. "Both senior management and our current investors are continuing to scour potential funding sources for money for a reconstituted, much smaller company, but we cannot be assured that those efforts will be successful or will result in the re-hiring of some employees."

Kurtz confirmed the letter's authenticity. However, she denied that the company was shutting its doors. "That's incorrect. That should not have read that way," she says.

"At this point, we still have about a hundred people plowing ahead, and we're still exploring a bunch of financial alternatives. We are exploring a lot of options, and there's no way for me to tell you with any certainty what's going to happen."

What happens next is hard to guess, as Tachion's story has changed several times in the past year. Tachion's flagship product, the Fusion 5000, was designed to be a central office switch that combines frame relay, IP, ATM, SS7 signaling, voice services, and an integrated Sonet add/drop multiplexer. The company has not yet been able to ship that product commercially.

In April, Tachion said that instead of shipping a fully loaded box to its previously announced customers -- which included TelePacific Communications, ACD.net, and Gabriel Communications -- it had shipped an Internet offload application to several different, unnamed customers. Kurtz says Tachion's Internet offload product is being well received (see Another Tack for Tachion).

In May, Tachion CEO Jeff Matros told WallStreetReporter.com that Tachion had raised $84 million in funding to date, with $25 million of that coming from Lehman Brothers (see Tachion Gets $50M 3rd Round). Matros told the publication that Tachion was hunting for between $40 million and $50 million in new funding.

Tachion's investors include Lehman Brothers Venture Capital Group, Goldman Sachs & Co., J.P. Morgan & Co., Morgenthaler Ventures, Walden International Investment Group, WaldenVC, and Singapore's EDB Investments. Its board members include Matros, McLeodUSA (Nasdaq: MCLD) director Roy A. Wilkens, and Mike Odrich, Managing Director and Head of Lehman Brothers' Private Equity Division.

- Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com

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pastel
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pastel,
User Rank: Light Beer
12/4/2012 | 8:13:07 PM
re: Crunch Time at Tachion
MIB: "LR just posted a new article. We are going to get hammered again by those former Tachion mal-contents. We've got to do something quick."

Spokes Person (SP): "How about a press release. I can whip something up quick. A few quotes here and there."

MIB: "You'll need my input. The last time I let you do something we were a laughing stock with those stupid safes. Do we still have some? I'm wondering what we can get for them on eBAY?"

Upchuck: "I think a press release is a great idea. We will put on a marketing blitz that should buy us some time. Where is our PR guy? He was a great spin doctor. He could make the F5K look like it could do more than be a door stop!"

SP: "He left months ago. Probably working for a competitor now. The one that has to do something about a fire at WCOM."

MIB: "Ok, we need a diversion. We need a catchy name and some vaporware to get us through this."

CFO: "We don't have much money to do much."

MIB: "Have you figured out how much we have left yet?"

CFO: "No, but we still have checks left in the checkbook so we must have some money."

GC: "I can probably open several internet accounts. I'm known by name on several sites. That could hold us for a few weeks. Maybe we should open up a site like one of my favorites. I hear that generates tons of cash."

MIB: "Not a bad idea. I could plaster my face all over the internet. Could really help to build up the image."

SP: "How are we doing on those law suits? By the way, I have that former sales guy now believing that I did give him up to get him fired."

GC: "I lost the paperwork. It'll only cost another $63K to get them all going again."

MIB: "Ok, let's sue LR to shut down all those nasty, untrue postings. That should give us some time to pull the wool over some unsuspecting VCs eyes."

GC: "You mean those postings weren't true?"

CFO: "There's not a VC in the country that we have not talked to in the last month."

MIB: "Then it's international we go. Book me a flight to London, Paris, and Tokyo. There has to be some idiot in the world that can give us some money. And oh yes, I'll need my admin to assist me. We're going to set the international marketplace on fire. Just like the old days, we are going to hit it big. What did we decide to sell again?"
switchrus
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switchrus,
User Rank: Light Beer
12/4/2012 | 8:13:06 PM
re: Crunch Time at Tachion
Great Stuff

Any chance of this being made into a movie of the week ?

Staring Paul Rubins aka Pee Wee Herman as MIB ?

Other casting plans ?
researcher
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researcher,
User Rank: Light Beer
12/4/2012 | 8:13:05 PM
re: Crunch Time at Tachion
all right...more episodes! bring yours on too, mib! your readership is grateful!

researcher
yomama
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yomama,
User Rank: Light Beer
12/4/2012 | 8:13:05 PM
re: Crunch Time at Tachion
Another GOD box down the drain!!!!!Shocking....Let's see whose next......could it be Ennovate Networks......or maybe...Corriolis Networks....led by a guy from VideoServer..give me a break.....who knows....stay tuned to your Rt 495...radio...


bahahahwahabahahwhahahahhhwhwhahahahahahahahahah
who is john galt?
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who is john galt?,
User Rank: Light Beer
12/4/2012 | 8:13:05 PM
re: Crunch Time at Tachion
"Great Stuff

Any chance of this being made into a movie of the week ?

Staring Paul Rubins aka Pee Wee Herman as MIB ?

Other casting plans ?"

Hey, Paul Rubins is making a comeback these days. I don't think he would want this type of a role associated with him....
Lots'O'Cabbage
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Lots'O'Cabbage,
User Rank: Light Beer
12/4/2012 | 8:13:00 PM
re: Crunch Time at Tachion
Ennovate Networks kept it's sales force until Supercomm was over. They just canned all the US Sales force.

The end is very Near!! Any bets on whether Ennovate will survive longer than Tachion???

The same 'ol story, management screwed the company.
manoflalambda
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manoflalambda,
User Rank: Light Beer
12/4/2012 | 8:12:59 PM
re: Crunch Time at Tachion
Heya, I head Princeton Optical folded as
well. Anyone keeping a list...

Salute,
Manoflalambda
themaninblack
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themaninblack,
User Rank: Light Beer
12/4/2012 | 8:12:58 PM
re: Crunch Time at Tachion
As a public service to this posting board I have "unspun" the LR interview with the Tachion spokeswoman. I considered selling banner ads to offset the expense of this public service, but the Quaker Oats Man refused to part with any of his signing/salary/severance monies to fund the effort.

LR: The company also appears to have told employees in a letter that it's shutting down -- although an official spokeswoman now says that such information was a miscommunication.

What She Really Meant: G«£We were in such a rush to get that letter out, were not sure what was in it. Of course, weG«÷re grateful that youG«÷ve faxed us a copy so that we can attempt to spin it. WhatG«÷s that G«Ű Microsoft Word has a save feature? I knew we shouldnG«÷t have let all those IT people go..." - and - "We hurried to shut this thing down so that certain company executives could line their pockets with what cash remained. Taken, of course, in "severance packages", hey do cars count in that calculation?

LR: The telecommunications equipment maker won't confirm how many people it let go, only that it has "about a hundred" people still on staff, according to Tachion spokewoman Liza Kurtz.

What She Really Meant: G«£WeG«÷re really not sure how many people are left, hell, we werenG«÷t sure how many really worked here in the first place. Besides counting is an HR and finance function. It did seem to swell around pizza lunchtime on FridayG«÷s however. Do the homeless who crash lunch count as employees?" - and - "The new business plan only called for 65 people to remain, but that just didn't have enough sycophants and brown nosers in it for the MIB and Upchuck, so we fired the engineers and retained the SG&A employees. Lets hope they read and learn that "coding for dummies" book real fast."


LR: The letter also states that Tachion itself is shutting down. "Effective today, Tachion Networks, Inc. will shut down all of its operations," the letter states. "Both senior management and our current investors are continuing to scour potential funding sources for money for a reconstituted, much smaller company, but we cannot be assured that those efforts will be successful or will result in the re-hiring of some employees."

What She Really Meant: This is the one last slim chance for the MIB to keep the Audi, and enjoy his Friday afternoons in those private, offsite G«£teambuildingG«• sessions at the Eatontown Sheraton. - and - "We are hoping that we can fool some idiot into cutting us a check, by re-naming the company in a new entity. Does anyone have the list of foreign, non-English speaking VC's with lots of money and low IQ's?"

LR: Kurtz confirmed the letter's authenticity. However, she denied that the company was shutting its doors. "That's incorrect. That should not have read that way," she says.

What She Really Meant: I knew we should have hired a real lawyer or outside counsel to write that letter. We canG«÷t get our own in-house counsel to stop surfing the Swedish porn sites long enough to do any real work...and to think I gave up my rent controlled New York apartment for this crap.... - and - "What we meant to say isn't what we wrote, because if we actually wrote what we meant to say, we might get held to it." - and - "You mean we actually have to start telling the truth? Whoa, this is going to be hard."

LR: "At this point, we still have about a hundred people plowing ahead, and we're still exploring a bunch of financial alternatives. We are exploring a lot of options, and there's no way for me to tell you with any certainty what's going to happen."

What She Really Meant: Most people are doing what they have always done at Tachion - mill about aimlessly, drink the Kool-Aid, eat the free food, and generally just screw off. We are exploring a lot options, most of which include bake sales, car washes, and raffling the MIB off as a "hot date" to the local lonely hearts club of Hoboken.

lighthearted
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lighthearted,
User Rank: Light Beer
12/4/2012 | 8:12:54 PM
re: Crunch Time at Tachion
Does anybody have any information regarding ANDA Networks?
lighthearted
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lighthearted,
User Rank: Light Beer
12/4/2012 | 8:12:52 PM
re: Crunch Time at Tachion
they're american and are in a similar space as tachion and sonus. nice try, though. does anybody else have any clues regarding their current business health?
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