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Optical/IP

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
http://www.lightreading.com
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lite guide 12/4/2012 | 10:53:56 PM
re: Maple Continues to Shed 60 administrative types were let go? How many administrators does a company with 155 employees really need anyway? Are the executives running these companies ex-politicians or what? I have never seen so many spin doctors at work!

On a different note, has anyone heard news about Photuris? They have been in stealth mode for quite a while.
marete 12/4/2012 | 10:53:56 PM
re: Maple Continues to Shed
Any of you folks hear how Gotham Networks is doing nowadays?
internetspeed 12/4/2012 | 10:53:54 PM
re: Maple Continues to Shed
Does anyone know why the Maple CTO left ?
I heard he was the main founder. Did he not
get along with the Raza folks ?

I don't think the company has a chance without
the CTO.
henry_wu73 12/4/2012 | 10:53:53 PM
re: Maple Continues to Shed
I do not understand how a high tech company can survive without their main brain behind the product.

I hear that their product was totally conceptualized by their CTO. They may go the way of other loser startups.
jenny_pardes 12/4/2012 | 10:53:53 PM
re: Maple Continues to Shed
I was involved with Maple in one of their founding rounds. I thought that their CTO was the only person who knew anything about networking and carrier networks.

Their other founders were too self important and their CEO appeared totally ignorant.

I hope they know what product they are building without their CTO.
sherman_douglas 12/4/2012 | 10:53:53 PM
re: Maple Continues to Shed
As an ex-employee I know that the founders always fought for power and one of them constantly sucked up to Raza. Nobody cared for the CTOs opinion.

The CTO was the only person who was level headed and reasonable.

glb 12/4/2012 | 10:53:52 PM
re: Maple Continues to Shed "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"

If truly 60 of the 155 were administrative, then they were doomed from the start, with never any chance of survival. I can't imagine more than about 5 administrative types as being necessary for a company of 155 people! One HR person, one IT person, and three or so clerical, accounting,and purchasing types should have been enough for a ~150 person startup that had its head on right!

Stick a fork in 'em. They're done! No Springtime Leaves are budding for Maple! No doubt the "syrup" has already been tapped, and the money is already syphoned into buckets for the officers.
optimight2002 12/4/2012 | 10:53:51 PM
re: Maple Continues to Shed Chip CTO damaged the company, his leaving will be a nonfactor. New CEO comes in, cuts staff to stretch cash, takes control and announces the layoff (few companies do). Smart guy taking control, only chance in hell to turn this rudderless ship around. The real question is will the ego maniac founders listen. We had this problem at my company. The founders would not listen to the new CEO and undermined him. A friend who did marketing for amber saw him in action and said he is smart and has potential but that may not be enough for this situation.
light-headed 12/4/2012 | 10:53:51 PM
re: Maple Continues to Shed "I thought that their CTO was the only person who knew anything about networking and carrier networks."

uuuuuuuuuuhhhhhh... he was a chip guy... no experience or knowledge about carrier networks... and apparently not much knowledge about the product either... why would one genius hang out with a pack of fools... remember you are defined by the company you keep. CTO leaving is a non-factor...
painkiller 12/4/2012 | 10:53:51 PM
re: Maple Continues to Shed
I heard this CTO has done successful startups before. Why did he fail this time ? Maybe the other founders were incompetent. Maybe because they brought in Nortel jokers.

This maybe a great lesson for VCs. Check out the management team before putting your millions. I guess Atiq Raza is a rookie in the VC business. Such huge losses should teach him great lessons in venture investing.
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