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Optical/IP

Headcount: Mama Mia!

American companies are running out of ways to motivate employees.

A paycheck and a handshake used to do the trick, but now employees want more, and employers are getting (unpleasantly) creative.

New Edge Networks Inc., for instance, announced this week that it is about to finish a nationwide telecommunications network for Sbarro, the pizza sbecialists. And, as a reward for getting the network up and running in a timely manner, Sbarro has agreed to provide New Edge Networks employees 10 pizzas a week for one year.

Oh dear.

Headcount resides near Dallas, a city that probably has more malls than schools, so we know well the bountiful, bland cuisine peddled by Sbarro, which dubs itself "the largest shopping-center-based Italian restaurant chain in the world."

We offer this conspiracy theory: The folks at New Edge, stuck between a rock and a hard crust, decided to finish the work on time because Sbarro threatened to give them 15 pizzas a week for three years if they didn't make their deadline.

Got some other tasty examples of employee motivation? Please do send a note to [email protected]. Meanwhile, we'll review some of the other hirings and firings of the past few days:

  • Something Rotten in Denmark? Tellabs is restructuring its operations in Denmark and Finland, and, in two separate actions, the company could eliminate as many as 210 employees, Headcount has learned. Tellabs Denmark is negotiating with employee representatives so the company can perform a layoff there that will affect around 100 folks. That action was first announced in Denmark back on January 12. Today, Headcount learned of a similar action happening in Finland -- a planned restructuring that a Tellabs spokeswoman says may affect as many as 110 Finns.

    Tellabs says that the actions aren't aimed at any particular product line. They're simply an attempt to bring the company's costs in line with its revenues. But an internal document supplied by a Tellabs Denmark employee suggests that some slowdown will occur, at least in that region.

    "We will continue the development of our Ethernet solution, but not with the same speed as previously seen," the document states. "The cost cuttings will have an effect on R&D projects as well as some will not be continued."

  • Birds of a Feather: Has Charter Communications (Nasdaq: CHTR) become the Seattle Seahawks of the cable industry? Both entities are Paul Allen properties (coincidence?), and both have a remarkable habit of attracting talent, then finding ways to fumble and bumble and completely disappoint. This week, at Charter, president and CEO Carl "Bird" Vogel resigned from his post nearly a full year before his employment contract was due to expire. And as for the Seahawks… they did nothing. Toast.

    HealthSouth Corp. chairman Robert P. May, a Charter director, has become the firm's interim president and CEO. May was the chief operating officer of Cablevision Systems Corp. (NYSE: CVC) from 1996 to 1998.

    "We believe that tensions between Mr. Vogel and the board (and controlling shareholder Paul Allen) over the rate of progress was likely the primary motivation behind Mr. Vogel's departure," writes Friedman Billings Ramsey & Co. Inc. analyst Alan Bezoza in a note to clients today.

    Vogel's departure is just another in a long line of wince-inducing news coming from Charter's executive offices in the past six months.

    Michael P. Huseby, executive VP and CFO, resigned effective August 20, 2004. Margaret A. Bellville, Charter's executive VP and COO, resigned effective September 30, 2004. And, in December, former Charter COO David Barford -- the man Bellville replaced -- pled guilty to conspiracy to commit wire fraud relating to his participation in a scheme to inflate Charter's subscriber numbers.

    "Despite the company's vow to redouble efforts to improve operations, we believe this is even more difficult, given major vacancies in Charter's senior ranks (CEO, COO, and CFO) and the potential departure of other senior managers loyal to Vogel," Bezoza writes.

    Investors noted their disappointment as Charter's shares sank to a 52-week low: The company's shares fell $0.13 (6.34%) to $1.92 in Tuesday trading.

  • Switched Off: Optical switch maker Calient Networks Inc. says it cut 15 percent of its workforce, including its CFO, Bill Zerella, on January 5. It's not clear how many people were affected by the restructuring -- the last known headcount at Calient was 65 people, but that was more than two years ago (see Headcount: The Party's Over). After Light Reading made inquiries on Tuesday about Calient's restructuring, the company removed two names from its management page: Zerella and VP of customer service Michael Ivers.

  • Going Global (Again): General Bandwidth has begun expanding its international operations and has added Hari Haran as its VP of international sales. Haran spent more than 12 years at Lucent Technologies Inc. (NYSE: LU) where he was VP, president, and general manager of the EMEA (Europe, Middle East, Africa) regions. The company's EMEA efforts were first launched in 2000 by a former Alcatel (NYSE: ALA; Paris: CGEP:PA) executive named Craig Hicks-Frazer. No word yet as to whether Haran will consider hyphenating his name out of solidarity.

    Here are some of the other appointments and disappointments from the past several days:

    That's all for this go-round. Keep those news tips coming to: [email protected].

    — Phil Harvey, News Editor, Light Reading

  • Page 1 / 3   >   >>
    bubble-boy 12/5/2012 | 3:29:21 AM
    re: Headcount: Mama Mia! Could not have said it better!

    The Calient fiefdom is ruled by Lord Corbalis in a land were nothing can be done as well as he... My horse! My horse! My kingdom for a Horse!
    optical 12/5/2012 | 3:29:21 AM
    re: Headcount: Mama Mia! Calient needs to consider reducing headcount by 100%. Almost $300 in total investment and what does this company have to show for it? btw - Corbalis is your typical smart nerd boy engineer turned CEO who has the leadership skills of a wet paper bag. Great VP Engineering, Clueless (and rather sad) CEO.
    redface 12/5/2012 | 3:29:20 AM
    re: Headcount: Mama Mia! "Almost $300M in total investment and what does this company have to show for it?"

    Is it true that Calient really has nothing to show for it? I heard its large switch works fine. Recently KDD deployed it in their network. For this reason Calient recently obtained $35M additional funding. What I am missing?
    optical_1 12/5/2012 | 3:29:18 AM
    re: Headcount: Mama Mia! Infinera did 10 percent layoff 2 months back. Heard
    from a friend.
    reoptic 12/5/2012 | 3:29:18 AM
    re: Headcount: Mama Mia! Sorry to hear of the man's death when he was so close to seeing the exit for his company that he sought for a long time. Guy worked very hard and was an good person facing a tough situation. Company and CEO casualties of telecom meltdown...
    Balet 12/5/2012 | 3:29:17 AM
    re: Headcount: Mama Mia! Who else is alive in large portcount crossconnects?
    Glimmerglass ...that's it?
    y2k 12/5/2012 | 3:29:14 AM
    re: Headcount: Mama Mia! Glimmerglass and Continuum Photonics ... But Glimmerglass is really the only "real" player left. They have been shipping products for more than two years now. There are basically "zero" business for MEMS cross connects in telecom, not now, not ever. Glimmerglass is selling products to test labs and video patch panel applications, occasionally competiting with someone like Apcon which sells an electronic version of the "physical layer" switches.
    y2k 12/5/2012 | 3:29:13 AM
    re: Headcount: Mama Mia! "Too bad that Glimmerglass is eating their lunch!"

    There is NO lunch. No one is feasting. Glimmerglass is the only one left, taking 100% of a laughably small market. And it is not going to be a very profitable business even for Glimmerglass given the high fixed cost structure associated with MEMS.

    MEMS optical cross connect was a nice experiment and lots of money have been spend. Everyone did everything right. But just no market.

    There is no market, not just because of the telecom meltdown, but because the growth in bandwidth is no longer so dramatic that electronic switching cannot keep up, and also that telecom is a mature industry once again such that there are no new players who are willing to buy from startups.

    This is a problem not just for Calient and Glimmerglass but for Light Reading as well. We are just not as relevant as we used to be.
    bubble-boy 12/5/2012 | 3:29:13 AM
    re: Headcount: Mama Mia! Yes not much to show for $300M; besides some experiments in Japan and some really nice sales executivesGÇÖ bonuses.

    Last hope for these fellows is to replicate a Glimmer Glass model. Too bad that GG is already there and eating their lunch!

    They already had the lights dimmed in late 2004 for a couple of months (furlough for the entire staff) before the VCs rescued them yet again (money down the OOO drain). I hope this time they are put out of their misery.

    My prediction is "Lights out by year end 2005"
    Balet 12/5/2012 | 3:29:13 AM
    re: Headcount: Mama Mia! Good point. The market for large port count crossconnects is not big enough even for a single company.

    I believe GG and Calient can look at other, smaller ports switching markets (if they are not cost prohibitive). They can also join the crowd of MEMS people playing in non-telecom markets.
    I think Calient's marketing is too weak (but with great resumes) to get outside the box. I might be wrong but it looks like GG does not have marketing at all, trying to strengthen their sales organization rather than look at other markets.
    Page 1 / 3   >   >>
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