Maple Continues to Shed

Optical switch startup Maple Optical Systems laid off more than a third of its staff yesterday in an effort to cut costs.

“We have plenty of cash in the bank,” says Atul Kapadia, Maple's president and CEO. “But we believe this is the right way to manage our business right now. It will not impact our development, and we'll continue to stay on target with our ship date.”

The company says that 60 people out of 155 were let go. The downsizing was done primarily in administrative areas among workers who were not directly connected to revenue growth, says Kapadia.

Sources close to the company say the move was brought on by a lack of customer traction. One former employee says the company only had one carrier interested in its box: British Telecom (BT) (NYSE: BTY). The source claims talks between BT and Maple have recently shut down, and, as a result, the company decided to lay off much of its staff to conserve what little cash is left.

Kapadia denies this. While refusing to give details, he says the company is still talking to at least five potential customers. He also says he expects lab trials to begin soon, and he insists the company has plenty of cash on hand and the new layoffs are more of a precautionary measure than something done out of necessity.

Like many high-profile optical startups, Maple's record is a series of ups and downs. In August 2001, the company raised $40 million, bringing its total funding to $100 million (see Maple Nabs New Funding). Shortly after that round closed, the company laid off roughly 12 percent of its workforce and canned development of its all-optical switch (see Maple Turns Over a New Leaf). The company has since remained focused on the development of its Multiprotocol Label Switching (MPLS) core switch, the ML3200.

But times are tough for pure MPLS switches, as they are for most next-generation technologies. Other companies developing similar gear, such as Tenor Networks Inc. and Mahi Networks Inc., have also fallen on hard times. The product landscape is muddied further by the introduction of MPLS on core routers from companies like Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR).

As for the future, Kapadia admits that times are tough now, but he says that Maple will weather the storm. Could an acquisition be a good exit strategy? "Maybe," he says.

— Marguerite Reardon, Senior Editor, Light Reading
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harvey_mudds_mumma 12/4/2012 | 10:54:12 PM
re: Maple Continues to Shed "Tenor more or less invented the Core MPLS switch category..." Scott Clavenna

That's life Cisco putting on its homepage "Some people think we had something to do with the success of the router"

Damn with faint praise!
startup123 12/4/2012 | 10:54:12 PM
re: Maple Continues to Shed This company started as Maple networks, during the dwdm boom, changed it name to Maple optical systems. After the dwdm reality, fired all optical guys, and canned optical switch.

Now the CEO, CFO, CTO all are gone or fired (what is the difference) and with 90 people, the morale will be suffer. Looks like they are following the leader in MPLS swith "MAHI Networks" Fired CEO cut people.

Great prospects. With this kind of legacy behind the company, the working morale and quality of the development will be shitty. As soon as the economy picks up "it will be deserted".

God bless the new ceo, and whoever the poor company he is trying to sell it to. You know there are some stupid European system companies might still buy, these kind of junk companies.

Does "Zaffaire ring a bell".
new_light 12/4/2012 | 10:54:11 PM
re: Maple Continues to Shed The CTO should have his title changed to CSD (Chief Spin Doctor). They laid off mostly engneering personel, including the Director of Software Engneering, VP of Hardware Engineering and the Director of Human Resources. Everyone left is scrambling like hell to get out of there.
Their ASICs still aren't working and rumour has it the only people that will be attending the demo are the ones presenting it.
the_reality 12/4/2012 | 10:54:08 PM
re: Maple Continues to Shed I have seen this style of Atiq Raza functioning.

In the companies which Raza foundaries has funded, Atiq sits as a chairman.

He along with some other business Development person will be on the board.

When ever he gets pissed with the way things are happening, he puts one of his men whom he wants to remove from his company as its CEO.

Everyone knows that Maple is not survive, and
Atiq gets two things done at same time, removing Atul as maple goes down.

He did the same thing at RedWave Networks and reality Andrew Fine is gone from Redwave and Raza.

So Atul, beware your time has come, search for another oppurtunity or you will go as Andrew Fine went........

lightcreeping 12/4/2012 | 10:54:03 PM
re: Maple Continues to Shed 60 people doing administrative and non-revenue generating related work? Sounds kinda shifty - no? They're hanging on by their toenails.
light-headed 12/4/2012 | 10:53:58 PM
re: Maple Continues to Shed the downward spiral truly began the day they were founded... ;-)
ye_ole_hacker 12/4/2012 | 10:53:58 PM
re: Maple Continues to Shed The download spiral started a long time ago. They couldn't get the job done with 150 folks let alone 90 now. They have even re-done their web-site, a fresh start perhaps? I doubt it. This place is a real mess: hardware doesn't work together, management team has no clue, no customers (lost Quest), and running out of money. Rumor has it the Director of Hardware, Director Software, VP of HR, and a lot of engineering folks were let go. They should have shown the new Hardware VP and founder the door.
light-headed 12/4/2012 | 10:53:58 PM
re: Maple Continues to Shed Maple = dead
Maple founders = garbage
Maple executives/VCs = liars
Nuetrino 12/4/2012 | 10:53:58 PM
re: Maple Continues to Shed It was just a matter of time. I thought (former) CEO Bill Joll had a lot if credibility and good background for this type of company. There were a few other Bozo's on the exec team that made no sense at all.

IMHO the window for this type of product never opened and the next wave of innovation will start to hit the streets late this year when (hopefully) carriers have some cash for capex.

Raza, Khosla etc - these are not happy people!
ye_ole_hacker 12/4/2012 | 10:53:57 PM
re: Maple Continues to Shed Yep...

Maple = 0xDEADBEEF
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