Maple Continues to Shed
“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