Headcount: The Party's Over

What a difference four years makes. Back in October 1999, Telecom Geneva, the monster trade show sponsored by the International Telecommunication Union (ITU), buzzed with activity. It attracted everybody who was anybody in telecom. Double-decker booths and sputtering cappuccino machines were all the rage.

This year, the scene’s quite different. There's only one instance of loud music and dancing girls at the show (conveniently near the press center), and there’s also a lot of wide-open, empty booth space (see All Quiet on the Geneva Front). Not surprising, considering what the industry has been through in the past four years.

In 1999, the Internet bubble was at its pinnacle. Companies couldn’t hire engineers, marketing execs, and PR flacks fast enough. Instead of popping open a bottle of champagne and partying like it’s 1999, most folks today are handing out extra copies of their resumes at Pink Slip Parties.

Hopefully, the industry will look different when ITU 2007 rolls around.

Without further ado, let’s take a look at the latest hirings, firings, shutdowns, and furloughs of the last few weeks:

  • Optical switch maker Calient Networks Inc. is still standing, but just barely. Charles Corbalis, the company’s CEO, confirmed that it has put an undisclosed number of workers on furlough until it’s able to nail down its fifth round of funding.

    “Because we’re in the midst of this funding round, our board wanted to make sure that we didn’t get too far down into our cash reserves,” he said.

    The company currently has 65 employees on its roster. Corbalis wouldn’t say how many of them are now on furlough, but he said that enough people are around on a day-to-day basis to handle the company’s product shipments.

    The company has raised a total of $251 million in four rounds. The latest round was in December 2000 for $195 million.

  • Word in the Boston area is that startup Nauticus Networks Inc. is no more. According to one of its former employees, the company shut its doors last week. Nauticus, which was funded by Charles River Ventures, Matrix Partners, North Bridge Venture Partners, and Advent International, supposedly had a term sheet in hand for another round of funding, but wasn’t able to secure a bridge loan. As a result, management was forced to pull the plug last Thursday.

    At least one executive is still hanging around the office. CEO Josh Weiss picked up his phone on Tuesday, but when he heard it was Headcount he refused to answer questions. He said he’d call right back – yeah, right.

  • TriQuint Semiconductor Inc. (Nasdaq: TQNT) has laid off roughly 30 technicians from Agere Systems Inc.'s (NYSE: AGR.A) former optical components business, according to a source close to the company. About 300 employees work at the ex-Agere facility in Breinigsville, Pa., including 100 former Lucent/Agere castoffs hired after the sale to TriQuint, says the source. Most of the jobs are temporary, as TriQuint is moving production to facilities in Texas and Mexico – but the layoffs, which hit about two weeks ago, came earlier than expected. TriQuint officials did not return a call for comment.
  • Extreme Networks Inc.’s (Nasdaq: EXTR) loss is Overture Networks Inc.’s gain. Chip Redden, former director of marketing at Extreme, has left to head marketing at optical Ethernet startup Overture. Redden’s not the first exec to fly the coop recently. Extreme is still searching for a new CFO following Hal Covert's departure in July (see Extreme's CFO Checks Out and Analysts Chart Extreme Comeback).

  • NetScreen Technologies Inc. (Nasdaq: NSCN), a security appliance vendor, says it plans to keep all 160 employees from its recent Neoteris Inc. acquisition (see NetScreen Snags SSL Leader). Netscreen, which currently has 630 employees of its own, has already found jobs for 90 percent of the Neoteris staff, says David Flynn, vice president of marketing for Netscreen. As for the other 10 percent, Netscreen hopes to slot them into some of the 40 open positions it has, Flynn adds.

  • The optical components maker Centellax Inc. has consolidated operations, but president Jose Perdomo assures Headcount that no jobs have been lost as a result. In September, Centellax closed its Carlsbad facility and relocated workers to its Santa Rosa headquarters. The company’s headcount is holding steady at 28 employees – for now.

    Here's a summary of other industry appointments (and disappointments) from the past two weeks:

  • Luca Martini Leaves Level 3
  • BroadLight Names CEO, Chairman
  • IP Dynamics Appoints Sales VP
  • Glowpoint Names CEO
  • Terayon Hires Two VPs
  • Telindus Hires Biz Dev VP
  • Finisar Nips 'n' Tucks
  • Tellabs Lays Off 370 We’re always looking for info, so if we missed anything, send a tip to [email protected].

    — Marguerite Reardon and Craig Matsumoto, Senior Editors, Light Reading

  • Page 1 / 12   >   >>
    right_leading 12/5/2012 | 2:37:38 AM
    re: Headcount: The Party's Over http://www.sun.com/smi/Press/s...
    crapshooter 12/4/2012 | 11:20:16 PM
    re: Headcount: The Party's Over This is not a situation exclusive to Calient, but here's a company that has raised $251M in funds to date and it's looking to score a fifth round. Who in their right mind would give them a penny more? Sure, the industry went in the tank, but Calient's management team still let a HECK of a lot of cash get burned away to God knows where. Fiscal responsibility needed to rear it's head at least two years ago. What did they do to lower operating expenses in that time frame?

    With 65 employees, payroll couldn't be that high (could it?). They'd be lucky to get someone to cough up a couple million, and for that they'd need to turn over the keys.
    allip1 12/4/2012 | 11:20:15 PM
    re: Headcount: The Party's Over I am wondering is it the Startups or the VCs who don't know what they are doing?
    alchemy 12/4/2012 | 11:20:14 PM
    re: Headcount: The Party's Over I am wondering is it the Startups or the VCs who don't know what they are doing?

    I presume this isn't an exclusive or? ;)

    I think the easy money of the 90's created a lot of opportunities for both moron VCs who stupidly empowered new-grad MBAs; and incompetent teams with bad product ideas. There are still competent VCs out there and competent teams with sound business plans. Darwin is taking care of the rest.
    Krusty 12/4/2012 | 11:20:14 PM
    re: Headcount: The Party's Over It's no suprise they failed!

    Nauticus failed to deliver on the product. They never figured out really fast products don't sell themselves. As a end user I felt they had a product that lacked basic features and functions, and an executive team that missed that "didn't" get it.

    They ruined it for the next round of start-ups who have good technology!
    atmguy 12/4/2012 | 11:20:13 PM
    re: Headcount: The Party's Over
    >> am wondering is it the Startups or the VCs who don't know what they are doing?

    My guess would be both. Both VCs and these high flying CEO/CTO .. seem to be so clueless.

    My 2c.
    ThouShaltNotJudge 12/4/2012 | 11:20:13 PM
    re: Headcount: The Party's Over >> Darwin is taking care of the rest.

    Yeah, but it's a shame that evolution takes so long to weed-out bad genes. Certain VC's clue-phone has been ringing off the hook for 2-3 years, but they're too tied up in deal flow and slot protection to answer. And it seems calls aren't even getting through to the others (probably blocking problems on some startup's switch).
    RouterOttawa 12/4/2012 | 11:20:13 PM
    re: Headcount: The Party's Over The rumour mills are abuzz that Nortel and Alcatel ar set to chop yet again.
    Optical yet again (who would have thought?).
    crapshooter 12/4/2012 | 11:20:12 PM
    re: Headcount: The Party's Over "I am wondering is it the Startups or the VCs who don't know what they are doing?"


    While there is plenty of blame to go around, I think I'll give the nod to the startup over the VC, specifically many of the upper-level management teams running these companies (into the ground). Yes, the VC's blindly threw money around without a clue about the technology, but many companies took that money and pissed it away.

    There are a lot of startups that are hurting because there aren't enough purchase orders to go around, but there are also a fair share of startups that have been completely mismanaged by inexperienced CEO's that don't have a clue as to how to properly run a company (in good times or bad). They've saddled themselves with outrageous capex and opex burdens that make it virtually impossible to ever see black ink on the bottom line.

    Although it saddens me to see so many startups going bust (and many, many good people going down with them), I am afraid that we've got a long way to go in terms of company closings. I read a lot of talk about how we've hit bottom and there's only one way to go from here, but I don't think anyone realized just how many square miles must be navigated along the bottom before we can begin climbing out.
    hrdhtr 12/4/2012 | 11:20:12 PM
    re: Headcount: The Party's Over What ever happened to this entity?
    Page 1 / 12   >   >>
    Sign In