Amber Networks Cuts Staff

Amber Networks Inc. blamed the softening economy today as it announced it has laid off about 12 percent of its staff (see Amber Cuts Workforce). The company's headcount now stands at 235 after the layoffs, says Alex Dobrushin, the firm's vice president of marketing.

The layoffs and cost cutting come less than one month after Mike Johnson -- a former Ascend Networks colleague of Amber Networks CEO Sam Mathan -- was brought on board as chief financial officer, a position that had been previously unfilled.

Amber has ambitious plans to compete with Cisco Systems Inc. (Nasdaq: CSCO), among others, in the edge router market. The company is marketing a carrier-class router whose primary feature is redundant routing cards that enable automatic failover. Only five months ago, Amber tripled the size of its corporate headquarters, moving to a 68,500 square-foot facility formerly occupied by Premisys Communications, in Fremont, Calif. (Networking Trivia nugget: Premisys was bought by Zhone Technologies Inc. Zhone is led by Mory Ejabat, the former Ascend CEO who was Mathan's boss at Ascend and who joined Amber Networks' board of directors in August 2000. Kevin Bacon could not be reached for comment.)

In a prepared statement, Mathan said the demand for the firm's products is still strong and the job cuts won't affect its ability to "continue with product deliveries and customer trials as planned."

Amber hasn't publicly said who its customers are, nor has it revealed which firms are evaluating its product. Dobrushin says the company is in "long-term trials" with nine carriers and "some of those are also investors."

Late last summer, the company closed on a $91 million round of financing. Light Reading reported that, given Amber Networks' high-profile board members and financial backers -- which include Williams Communications Group (NYSE: WCG), Enron Corp. (NYSE: ENE), and several investment bankers and venture capitalists -- the firm appeared to be on a fast track for an initial public offering (see Amber Suiting Up for IPO?). As of yet, Amber Networks hasn't made a move in that direction, and the firm hasn't spoken publicly about any new fund-raising efforts either (see System Startups 'Face Tough Year').

Dobrushin says Amber Networks is still fully funded and based its staff cuts only on the reductions in carrier spending.

-- Phil Harvey, Senior Editor, Light Reading http://www.lightreading.com
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kupfi 12/4/2012 | 8:19:14 PM
re: Amber Networks Cuts Staff "Their box has nothing that customers want...Like features & interfaces"

You got it right. This is the biggest drawback of Amber.
Eagle 12/4/2012 | 8:19:14 PM
re: Amber Networks Cuts Staff Crystalball,

I don't think the sky is falling on the entire DotCom industry. I think the sky is falling at Amber. Every rep they got is looking around at other opportunities. Not one potential customer is impressed enough to deploy a box in a live network. Most of customers are shipping back their lab unit.

Look at Unisphere, their box is working and in installed in live networks. They are coming out with impressive new cards with better density and feature set. They are going to take some serious market share from Cisco & Juniper.

Bottom line, the DotCom's that are building something the customers needs and wants will make a profit, the companies (Amber) that are building a cool science project are going to collect their First Place ribbons (at SuperComm 2000) and close the doors within 18 months, maybe sooner, if they are lucky.

Good thing, their are plenty of other sucessful, profit minded companies out their to hook up with!

Any Comments?
Eagle 12/4/2012 | 8:19:10 PM
re: Amber Networks Cuts Staff Not only are they missing features & interfaces...they are missing a qualified CEO.

This guy has no skin in the game. If Amber goes belly up, he is still a multi millionaire. All the employees, if Amber goes belly up, they are belling up to the laptop to brush up their resume.

Not a good guy to walk the plank with. On top of that, he does not keep his word, he has no loyalty, and that mixed with his inexperience is absolutley fatal. Or maybe "doomed" is a better word. This obvioulsy will be his last run at CEO.

Hope he enjoys the ride while it lasts.

opticguy 12/4/2012 | 8:18:59 PM
re: Amber Networks Cuts Staff I agree. It's just a matter of months !!!

Actually, there is one respected name of Amber's executives, the CTO. The rest are all third-tier and fourth-tier players, which include the marketing group VP and AVP.

My 2 cents.
Eagle 12/4/2012 | 8:18:54 PM
re: Amber Networks Cuts Staff Opticguy,

Good point. The CTO- I as well have a lot of respect for him and think he is top of the line guy. Too bad Amber does not have more with his sense of dedication, ambition, and inspiration.

Good guy, bad company, bad CEO, bad VP's of sales. What exactly did the CEO & VP's of Sales do while at Amber waiting for product. Most CEO's & VP's of Sales structure long term agreements with Carriers. Large Multi Million $$$ deals. These agreements are contingent on testing out features and services prior to shipping. If product works, they must buy quantity in contract. Once company builds what carrier asked for, boom, both sides get what they want, working product and revenue. Sad part of this, Amber CEO & VP Sales did none of this.

And they wonder why things are not going well there. Hey, maybe if we fire more people, things will get better!?! NOT!

whineceller 12/4/2012 | 8:18:50 PM
re: Amber Networks Cuts Staff only time will tell, my guess is that they will
be bought and soon.
kupfi 12/4/2012 | 8:18:46 PM
re: Amber Networks Cuts Staff They might be bought because they are so highly rated by the (so called) analysts. According the the anal-ysts, the only three companies who have a chance in the edge-router space are: Amber, Gotham and Laurel.
Eagle 12/4/2012 | 8:18:46 PM
re: Amber Networks Cuts Staff Not a chance. What are they buying? Amber has not been able to sell one box. Why would someone buy something that no Carrier or CLEC want.

Lots'O'Cabbage 12/4/2012 | 8:18:43 PM
re: Amber Networks Cuts Staff Can someone tell me where Ennovate Networks fits into this IP Services technology? I thought these guys were competitors to Amber?

You do not here much about Ennovate anymore.

Any speculations?

opticguy 12/4/2012 | 8:18:36 PM
re: Amber Networks Cuts Staff After announced the product at Jun 2000, and GA at Q4 of 2000, up to now, there is NO sales announcement from Amber. Not even 1 cent. Zil. Look at other startups, if they have something ..... decent offered, small contracts would be signed (Zaffire, Quantum Bridge, Alidian, Mayan, Astra Point, .etc....).

So, what did go wrong ?????

My guests are:

1) They offer something that are already available from the other big three (cisco,juniper,and unisphere), not counting the second-tier players such as Marconi, Ericsson, Alcatel,.....

2) Will Amber be around in .... 12 months to support the customers (this is the question on all potential customer mind ?)

3) Does the product solidly build ? (after lab trials, sales will be announced if the test show SOLID results)

4) Out of the big boys, only NT, NOK, LU needs OEM routing edge solutions. If the box does what it's supposed to do, I would expect OEM deals have already been announed........months ago from at least one company. Look at JNPR, once they showed everyone that the M40 was solid (back in 1998), sales and OEM deals was announed immediately.

5) any guests !!!!!!
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