Tenor Slashes Staff

Massachusetts startup Tenor Networks Inc. laid off about 50 people yesterday morning, or roughly 40 percent of its staff. The company is now down to 71 employees from about 120, say sources close to the company.

Tenor executives confirmed that there was a layoff but would not give numbers. David Tolwinski, the company's president and CEO, blames the reductions on continued uncertainty in the service provider market. The company also confirmed that it has closed down its development facility in Edinburgh, Scotland. The Edinburgh facility, which had opened up in March 2001, handled Asynchronous Transfer Mode (ATM) and routing protocol developments (see Tenor Opens in Scotland).

“The best advice we could get from experts is that carriers won’t start spending again until 2004,” says Tolwinski. “So we have to conserve cash. We have enough belief in our product and the feature set that we will still come out ahead when the market gets going again.”

So Tenor is buckling down in hopes of riding out the telecom slump -- although company officials recently insisted the company is not pursuing a "hibernation" strategy (see Bear Market Inspires Hibernation).

But despite the obvious problem of the carrier spending slump, Tenor's struggles also raise questions about the necessity of a distinct switch for delivering Multiprotocol Label Switching (MPLS) technology. The MPLS switch market, which looked promising back in 1999 and 2000, seems to have faded, as core routing vendors like Juniper Networks Inc. (Nasdaq: JNPR) and Cisco Systems Inc. (Nasdaq: CSCO) include MPLS technology in their gear. Tolwinski acknowledges that these other players have complicated the marketplace, but he claims that Tenor’s offering is differentiated enough that service providers will still need to buy Tenor gear.

“I’m sorry that the MPLS market didn’t develop into its own market,” he says. “But an MPLS switch like ours is still relevant and important. I saw the other MPLS implementations from competitors at the Supercomm demo and -- believe me -- ours is a lot more stable.”

Tenor’s MPLS switch, which it says has been generally available since last year, was part of the 21-vendor MPLS demonstration at Supercomm last week (see MPLS Forum Hosts Superdemo). The product is testing in at least three or four major carrier networks, says Tolwinski. But so far the company has not generated any revenue from these tests nor has it been able to secure any type of commitment contract.

Tenor hasn’t closed a round of funding since May 2000, although at that time it was one of the last of the communications startups to score big before the downturn. It raised $93 million in its third round of funding, bringing the total raised to $120 million. The company, which has never seen its headcount go above 150 employees, laid off about 10 percent of its workers back in May of last year (see Telecom Woes Prompt More Layoffs).

— Marguerite Reardon, Senior Editor, Light Reading
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straight shooter 12/4/2012 | 10:16:54 PM
re: Tenor Slashes Staff Probably the first of many post Supercomm actions hitting the press. Many companies were hanging on by threads just to be there.
DocGonzo 12/4/2012 | 10:16:53 PM
re: Tenor Slashes Staff G«£IG«÷m sorry that the MPLS market didnG«÷t develop into its own market,G«• he says. G«£But an MPLS switch like ours is still relevant and important. I saw the other MPLS implementations from competitors at the Supercomm demo and -- believe me -- ours is a lot more stable.G«•


Maybe so, but what really matters is having an installed base of customers; and enough of them to help you survive the down times. A more-stable demo does not make a company.

Interesting that Tolwinski's experts predict that the carriers will not start spending again until 2004.

false_rumors 12/4/2012 | 10:16:52 PM
re: Tenor Slashes Staff (from dictionary.com):


n 1: the torpid or resting state in which some animals pass the winter 2: cessation from or slowing of activity during the winter; especially slowing of metabolism in some animals 3: the act of retiring into inactivity; "he emerged from his hibernation to make his first appearance in several years"
jamesbond 12/4/2012 | 10:16:50 PM
re: Tenor Slashes Staff its coming.
startup_dreams 12/4/2012 | 10:16:50 PM
re: Tenor Slashes Staff I just heard that Calient also had a 60% layoffs yesterday ...

Is that a sign that there is no market for All Optical Switches.
Richard Hatch 12/4/2012 | 10:16:49 PM
re: Tenor Slashes Staff I just want to ask one question here...why are you blaming marketing and sales depts. when according to you the inferior product doesn't work? Attention all engineers: if the product doesn't work, there's nothing marketing and sales CAN do! The exceptional years of powerpoint and frothy vision-making are behind us...the table stakes these days are a good stable product.

Top 12 reasons why Zettacom is a joke.

8. Marketing & Sales dept. are not functioning at all. Cannot sell.
12. Inferior products. Nothing works and tries to cover it with next generation product
propaganda. A trap waiting for potential buyers to fall into.
cpr 12/4/2012 | 10:16:49 PM
re: Tenor Slashes Staff So did Bigbear and Teraburst n/w.

Post-SuperComm watch more companies disappear !

Marmaduke 12/4/2012 | 10:16:48 PM
re: Tenor Slashes Staff Nice bashing... very little to do with the article this thread relates to though (unless Tenor was using Zettacom products)...

Having been in a few startups, the only thing I can say is that:
a) You need many screw-ups by a few people (or a few by many) to go under...
b) If you choose to stay 2-3 years in a company while you were aware of the values and mistakes carried by the management, then you're not a victim but a fool.

I wouldn't be surprized if some/most of what you're claiming is true (yet I have no insider info to confirm or deny), but there is one thing I see again and again when a company goes down: it's always someone else's fault... other engineers, manufacturing, Management, VPs, directors, CEO, CTO, Architects, Sales, Marketing, PLM, etc...

I do agree though that those who tend to screw-up things tend to screw them up in many aspects of the business, not just one (since when only a few aspects are screwed up, natural selection and peer pressure usually clean-up messes).

whatsinname 12/4/2012 | 10:16:46 PM
re: Tenor Slashes Staff I just heard that Ciena had another lay off yesterday but they didn't announce it ...I heard even ONI did some 30-40% lay off last week.

any word ?
Meaning Less 12/4/2012 | 10:16:45 PM
re: Tenor Slashes Staff Now down to about 25, mostly engineering.

Drip, drip, drip.
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