Optical/IP Networks

Headcount: Synergy Qwest

Some carrier employees may be thankful that Qwest Communications International Inc. didn't ultimately win the battle for MCI Inc. (Nasdaq: MCIP). Before Verizon Communications Inc. (NYSE: VZ) raised its bid for MCI, Qwest was counting the bodies it would have to dump as it compiled a list of "synergies" with the long-distance carrier (see Verizon Goes to $26 and Qwest Qwits ).

Qwest's list of "synergy projections," filed with the Securities and Exchange Commission (SEC) last week, detail some major job cuts that would have been considered by a combined Qwest/MCI. Qwest, which employs about 41,000 now, said it would cut between 12,000 and 15,000 jobs, or 15 percent to 18 percent of a Qwest/MCI combo.

The combined carrier was expecting to free up 2.8 million square feet of office space, saving $57 million a year, with layoffs, SEC filings say.

Qwest would have cut 14 percent of the combined carrier's channel sales staff "in overlapping direct, staff, and support channel resources." It would have also knocked out 20 percent of the two carriers' combined wholesale groups "which have almost complete redundancy of customer lists."

Finally, the combined carrier would have knocked off a whopping 35 percent of jobs from its "finance, IT, HR, Legal, Product Management, and Corporate Communications" departments.

Now that MCI has once again hopped in Verizon's arms, the question remains: With whom will Qwest count synergies now?

While you ponder that, let's move on by bringing you the most interesting hirings and firings from the past few days:

  • Forget it – I'm all out of tree jokes: Optical switch maker Sycamore Networks Inc. (Nasdaq: SCMR) said last week it was cutting 6 percent of its workforce -- about 20 employees. "This workforce reduction is a result of the rationalization of certain R&D initiatives," the company announced. Sycamore will take a charge against earnings of between $1 million and $1.6 million during the period ended April 30, 2005 (see Sycamore Cuts 6% of Staff).

    For months, there have been rumors of a Sycamore closure, especially after the company brought in Morgan Stanley to help it explore "strategic alternatives." Those would be, Headcount assumes, alternatives to being a solid, profitable company.

  • A Diamond in the Quarry: Quarry Technologies Inc. has a new CEO, a new management team, some new customers, and new distribution partners. Other than that, business there is pretty much unchanged.

    The company confirmed this week that Steve Diamond has taken the job as CEO of Quarry, replacing Ian Mashiter, the founder of Ennovate Networks. Diamond hails from The Sprout Group, where he was a general partner and vegetable grower. He is also the former chairman of Internet Photonics, which Ciena Corp. (Nasdaq: CIEN) bought in 2004.

    Diamond says Quarry is going through some significant changes and has added 26 people to its payroll this year alone, giving it around 90 people overall. That number will grow to 110 by the year's end, Diamond says.

    While Quarry won't reveal much else, it did let slip that it has added a former Nortelian, Chris Vaughan, as VP of product development.

  • Gee, PON: Hitachi Ltd. (NYSE: HIT; Paris: PHA) has bought Salira Optical Network Systems Inc., the startup that claimed to be the "the number one Ethernet over PON (EPON) provider in China." Which, a few years ago, was like being the best hockey team in Equador.

    Sources say Salira was running low on cash and was looking for an exit. Hitachi won't say how much it spent on Salira, but the company says the deal gives it an EPON product portfolio, including some GE-PON (Gigabit Ethernet PON), which gives it the ability to build last-mile networks with speeds of up to 1 Gbit/s in each direction.

    "GE-PON is essential if you want to be a strong player in the Asian market," David Foote, CTO of Hitachi's Hitachi Telecom (USA) Inc. subsidiary, tells Headcount.

    The big picture, for Hitachi, is pretty clear. The company becomes one of the only vendors able to offer BPON, EPON, and GPON gear to carriers on any continent. "Our intent is to have the technology in our hip pocket and then to take that and commercialize it for each market," Foote says.

    Hitachi has a formidable PON business worldwide, and it counts NTT Communications Corp. as one of its largest customers. Salira's customers include China Netcom Corp. Ltd. (NYSE: CN; Hong Kong: 0906) and GuangZhou Pantong Information Broadband Network Ltd., colloquially known as "Panyu Cable."

  • Smell ya later: Optical equipment maker Celion Networks Inc. switched horses in midstream a few years ago, as it went from building transport gear for service providers to selling an "enterprise-class solution for transporting 10 Gbit/s wavelengths over extended metro distances without intermediate amplification or regeneration." (See Celion Scores $45 Million Round, Headcount: Miller's Oranges, and Celion Intros Enterprise Transport Gear.)

    The company also, for a time, called itself "an innovator in delivering transport solutions for data center connectivity."

    Somewhere along the way, however, Celion fell off both horses and was trampled. Then it was eaten by a large salmon, which was later eaten by a bear. Headcount has learned that Celion – in spite of several Grammy wins – is no more, apparently having closed up shop several weeks ago.

    Headcount's calls to the company never made it – its phones have been disconnected.

  • Lonely Mountain: It's not news that Copper Mountain Networks Inc. (Nasdaq: CMTN) -- or what's left of it -- is being bought by Tut Systems Inc. (Nasdaq: TUTS). What is interesting, though, is how many other companies passed on the opportunity to form some bond with Copper Mountain (see Tut to Acquire Copper Mountain).

    "Since August 31, 2004, Raymond James and Copper Mountain’s management contacted over 45 prospective strategic partners… Tut Systems was the only prospective party that expressed definitive interest in pursuing a transaction," Copper Mountain reveals in a recent SEC filing.


    The good news? After 45 firms passed on a cheap-as-chips way to get a complete central office-based B-RAS product line, the Mountain did come to Tut – but Tut only wants it for its cash, as was also the case with its aquisition of CoSine Communications Inc. (see Tut Takes On CoSine).

  • Bubb's Law: Network processors and related chips will be changing hands at Intel Corp. (Nasdaq: INTC), as Howard Bubb, vice president of what used to be the Communications Infrastructure Group, is leaving the company for a startup.

    Where's he going? "He won't say," a spokeswoman says. "He says it's still under NDA, so he's not disclosing it." Bubb, who joined Intel with the Dialogic acquisition of 1999, left the company last week.

    Taking his place will be Doug Davis, a vice president in the Digital Enterprise Group. That's been the home for network processors since Intel's January reorg, which split up the communications group. Most of the chips wound up with Digital Enterprise, which is run by CTO Pat Gelsinger, while the optics became part of the Digital Home Group.

  • Growing like a weed: Headcount writes a lot about which companies are cutting jobs and closing up. But who's growing these days? Several companies are hiring in small batches, but none has grown like Juniper Networks Inc. (Nasdaq: JNPR). Excluding the approximately 200 folks Juniper will add as it purchases Peribit and Redline, the router maker swelled in size by 94 percent over the past 12 months (see Juniper Takes Two: Peribit & Redline). Thanks to its acquisitions, Juniper grew to about 3,100 employees as of March 31, up from 1,600 a year earlier.

    We wrap up, as usual, with a summary of other industry appointments and disappointments from the past few days:

    That's all for now. Keep those news tips coming to [email protected]. Also, please send a note if you think Synergy Qwest would be a good name for a rock band.

    — Phil Harvey, News Editor, Light Reading

  • HOME
    Sign In