Headcount: Union Blues

Headcount Phil Harvey, Editor-in-Chief, Light Reading 7/21/2006

The nation's largest phone companies are merging with one another and converging their networks. This is good for the economy, so say the PR mavens, because when a new access network is built, new jobs are created, and more people are employed. (See Verizon Expands FTTP Plans.)

That's true in some specific areas. But across the country, union employees fear that even with the new services -- IPTV, VOIP, video on demand, etc. -- that are being introduced, more jobs will be cut. (See SBC Rounds Out IPTV Team.) "Packet networks, by their very nature, are going to need fewer people to manage them," says one old-school telco guy.

Despite hiring more customer service folks for call centers in areas where new services have been turned on, the phone companies are shrinking in size compared to their pre-merged selves. That's causing worry with the union guys because those whose jobs have been defined by older technologies are waking up to find their job functions being displaced by "managers" and contractors and IP specialists who don't carry union cards.

"When a carrier says they need to cut opex, they really mean they need to get rid of jobs," says one vendor source who breaks bread with union techs. "And that means the guys who drive trucks get the axe first."

It's not a story the phone companies like to talk about. But the cold reality is that fewer hands are needed for handling wires, cables, and old switches. When the new access networks are turned on, software does the provisioning, customers do the modem installations, and the tech support is phoned in from Bangalore.

"This network evolution is likely to be one of the more profound ones in the way it dislocates and relocates workers," says Kermit Ross, principal analyst at Millennium Marketing. "And this evolution is a heck of a lot more urgent because of the competitive pressure from cable and elsewhere." (See BellSouth Culls Middle Management.)

Headcount is looking for more of the stories related to the people-side of this network transformation. If you've got a yarn, feel free to let us know, and we'll do our best to unravel it.

Moving on, let's count down the five most interesting hirings and firings in recent weeks, followed by a Headcount news update:

No. 5: 2Wire and zero CEOs
Headcount sources say that 2Wire Inc. is on the hunt for a new man to sit in the chief's chair. The current president and CEO, Brian Hinman, isn't going anywhere yet. But the company is interviewing far and wide for the right candidate to lead 2Wire from being a smallish startup to a biggish player in the customer premises gear universe. 2Wire won't comment on its management plans, but Headcount sources say Hinman is a startup guy and likes to build stuff from nothing to something -- and 2Wire is much more than nothing these days. (See AT&T Hits Homezone, 2Wire Reaches UK, and 2Wire Inc.)

No. 4: Mangrove shrinks to grow?
Like sprouting a prehensile tail, Mangrove Systems Inc. 's spokeswoman tells Headcount, laying folks off is a "natural evolution of the company." But this evolution is "commensurate with the requirements for funding opportunities," she says. Headcount knows, in plain English, this means that while the company did take itself down a notch recently, it is hopeful to close a funding round soon and build sales in other parts of the world as it, again, hopes to build on its paying customer base of four. Mangrove won't say how many it cut recently, but it did reveal that only one of its four customers are in the U.S. (See Bidders Abound for Sprint Pseudowire RFP .)

No. 3: Caspian culls
Caspian Networks Inc. has always touted the idea of flow-based routing and, lately, we're wondering if that has something to do with its employees flowing to other companies, routing their skills around, for fear of ending up like so many dropped packets. Yes, Headcount sources say Caspian has again cut some heads, but the company, through its PR firm, won't discuss the move. It's worth noting, though, that Sandvine Inc. and other competitors couldn't be more thrilled at Caspian's hardships, judging by the number of tips received from those firms about this particular blip.

No. 2: Force10: a Blasing or a curse?
Headcount was intrigued to see that Force10 Networks Inc. , on June 29, announced it had hired a new CFO. (See Force10 Names CFO.) The last time the company publicly announced a CFO was when it appointed Ralph Harms to the post back in 2004. (See Force10 Rakes It In.) Now, it seems, Force10 is trying to get its finances out of Harms' way (ha!) with the hiring of industry vet Karen Blasing. Here was a company that looked to be Blasing a trail to go public. Obviously there was a lot more work left to do on the finance side of things, and it's hard to say now how close the switch maker is to getting a ticker symbol. This company, once thought to be heading for an exit, may just be in need of an open window for some fresh air. No. 1: Lucatel's French twist
The new company that will be formed when Lucent and Alcatel merge hasn't got an official name yet. But whatever the name, most of its senior staff and executives will be from Alcatel, giving the world an obvious nod as to which party in this merger of equals was more equal than the other. (See Lucatel Staff Face Wage Worries.) Lucent's Pat Russo will get the chief's chair, but most of her direct reports will be old Alcatel hands, as Light Reading so wonderfully charted several days ago, when the appointments were first announced. (See Lucatel: New Team, Old Faces.) And, oh, by the way, Mike Quigley isn't upset that he's not getting the top job at the new company. So there. (See Inside Lucatel: Quigley's Not Mad at Pat.)

And now here's a roundup of other industry appointments and disappointments from the past few days:

That's all for now. Keep those news tips coming to [email protected].

— Phil Harvey, News Editor, Light Reading