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Headcount: Scary Times Continue

Boo!

Halloween has passed, but the telecom world is as scary as ever. Here's a rundown of last week's hirings and firings, via "Headcount," our new editorial vehicle whose tires are being constantly kicked:

  • The artist formerly known as Williams – WilTel Communications Group Inc. (OTC: WTELV) – has handed the reigns over to a rookie. Jeff Storey succeeds Howard Janzen, who piloted the company to bankruptcy, as WilTel's new CEO and president (see Williams Bolts Out of Bankruptcy ). This is a pivotal moment for WilTel. Storey has never been in the chief's chair before and WilTel is fresh off a Chapter 11 exit with $375 million in funding. So why are Wall Street's yawns so deafening?

  • Alcatel SA (NYSE: ALA; Paris: CGEP:PA) says it will cut about 1,000 positions, or 13 percent of its overall U.S. workforce, by the end of the year.

  • LuxN Inc. has cut some heads recently, bitterly explaining that recent reports of its inroads with SBC Communications Inc. (NYSE: SBC) led to increased competition from Nortel Networks Corp. (NYSE/Toronto: NT) (see Sources: LuxN Close to SBC Deal). "Like any other company in this industry we've had to readjust and cut budgets," says Paul Zalloua, LuxN's VP of marketing.

  • Lynx Photonic Networks now employs 58 workers, down from 75 just a few days ago. The company has "taken the important strategic decision to ensure that the current funding level, in 'worst case scenario' planning, takes Lynx into 2006 and beyond," writes Dick Sadai, the company's former senior VP of business development, in an email note to just about everyone.

    Regrettably, Lynx PR maven Kelly Williams was one of the full-timers cut. Williams was always – well, usually – a good sport when Light Reading picked on Lynx for its hairline, its headlights, or its cracked rear-view.

  • Headcount hears from several sources that Rapid5 Networks Inc. has shut down. It's not clear how many jobs were affected. In August 2001, Rapid5 said its then spanking new digs could accommodate up to 150 employees.

    The company hasn't returned calls yet, but PR guy Matt McGinnis admits he's no longer pulling a paycheck. "I'm not going to be able to comment," McGinnis says. "I have my hands tied." Headcount wonders how he picked up the phone.

  • What in the Wide, Wide World of Sports is going on at Lucent Technologies Inc. (NYSE: LU)? Light Reading has reported that up to 180 jobs may have been snuffed, as the company ditches its TMX 880 business (see Lucent Chops TMX 880). Still, our sources won't stop dropping hints that another shoe is about to drop. Will Cisco Systems Inc. (Nasdaq: CSCO) and Sycamore Networks Inc. (Nasdaq: SCMR) buy a chunk of its ATM unit (see Cisco, Sycamore Circling Lucent's ATM)? Is Lucent's SpringTide product about to wash ashore and die of loneliness? Stay tuned.

  • Several publications have reported that Catena Networks Inc. has cut more employees, this time as many as 50 people. Voila! We have just become one of those publications.

  • Kestrel Solutions Inc. has reached the next chapter in its life story: Chapter 11. The company filed for bankruptcy protection in San Jose on October 21.

  • Finally, is Zhone Technologies Inc. close to acquiring Corona Networks Inc.? Sources say Corona employees are fearing the worst because Zhone's modus operandi is to follow a buy with a big swing of the axe. Zhone won't confirm or deny the rumor, but it wouldn't end a call without exuding some cockiness. "We've done seven acquistions to date," says Zhone marketing VP David Markowitz. "Who will get to be lucky number eight? It's been three months – I think we are probably due for another one."

  • In the telecom world, says one glum PR wag, "things would have to improve dramatically just to suck." Headcount couldn't agree more.

    — Phil Harvey and Marguerite Reardon, Senior Editors, Light Reading
    www.lightreading.com
  • Page 1 / 4   >   >>
    horse of a different color 12/4/2012 | 9:25:01 PM
    re: Headcount: Scary Times Continue Kestrel files for Chapter 11, huh? Well, no real surprise given the market and a less-than-mainstream product.

    I am a shareholder (and ex-employee) in this company. Can tell me what happens to my stock options at this point? I know that Chapter 11 is supposed to be for "protection" from creditors during a "restructuring period", but this company is only a skeleton of its former self. Is this perhaps a precursor to an acquisition? If a company sells it's IP to another company, what happens to the stock (private company)?

    I guess the real questions is this: At what point can I either get something ($'s or stock options) or write it off as a loss? Do have to wait for an outright aquisition or Chapter 7?

    Horse
    AMngr 12/4/2012 | 9:24:58 PM
    re: Headcount: Scary Times Continue Does anybody have any idea what's going on with TELM? Should I buy some or is the company is dead like so many others? Any insight will be appreciated.
    techstud 12/4/2012 | 9:24:58 PM
    re: Headcount: Scary Times Continue
    That can't be called aquistion as in this case the lead investor has decided to give away the assets of a bankrupt company to Zhone. Corona has no money to pay salary beyond this month. How much you can get for a dead cow these days? the company is making last minute attempt to get a particular company from France to invest some money to get some reprieve from sudden death and forced asset sale to Zhone.
    rzerockzeron 12/4/2012 | 9:24:56 PM
    re: Headcount: Scary Times Continue Stick with companies with real revenues...CSCO, NT, LU, JNPR, etc.
    rzerockzeron 12/4/2012 | 9:24:54 PM
    re: Headcount: Scary Times Continue Best sarcastic post ever!

    that one deserves a 5...no a 10!

    Congrats. I applaud your post. Keep up the good work.

    RZ.
    twistedcopper 12/4/2012 | 9:24:54 PM
    re: Headcount: Scary Times Continue i'm putting every free dollar into tellium. it's the safest optical company to be in right now.... still have over $billion in backorders and is #1 in the rapidly growing wavelength grooming switch market!!!! TELM to $10!!!! get in now!
    -twisted
    RJC 12/4/2012 | 9:24:52 PM
    re: Headcount: Scary Times Continue You wrote:
    This is a pivotal moment for WilTel. Storey has never been in the chief's chair before and WilTel is fresh off a Chapter 11 exit with $375 million in funding. So why are Wall Street's yawns so deafening?

    Are you serious? Maybe you can't hear much from the street because the investors still remember who got the shaft in the chap11 filing, and they know WCG has changed the name and the CEO, but not a damn thing in the business plan.
    Zen question modified for WCG: What's the sound of one hand giving you the finger?

    futureisbright 12/4/2012 | 9:24:51 PM
    re: Headcount: Scary Times Continue Judge for yourself!

    they recently severely reduced their headcount; mostly got rid of producing engineers, and kept refugees from Bell Labs in management position. Place looks like an inverted pyramid now.

    they recently bailed out their senior management who went out to buy TELM stock with corporate loans, and got way under water. Enron on a smaller scale.

    They are, allegedly working on a next gen product, since no one is buying their current one.

    They sit at $50M market cap with $200M in cash and virtually no debt. Between ongoing burn rate and management golden parachutes, $50M may be high.

    What's wrong with this picture?
    duedilig 12/4/2012 | 9:24:51 PM
    re: Headcount: Scary Times Continue Your initials wouldn't be JM or maybe BP would they?

    Over a $billion in useless paper you mean!!

    bb55 12/4/2012 | 9:24:50 PM
    re: Headcount: Scary Times Continue Does anybody know anything about Ottawa startups like : Tropic, Meriton, Innovance or Ceyba?

    Their funds must be almost drained out now...However no news about layoffs had been heard...They all employ close to 800 people, so they either close to this decission or they are lining out with some business...
    Page 1 / 4   >   >>
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