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Headcount: Less Is More

Light Reading
News Analysis
Light Reading
12/29/2003
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Many venture capitalists are expecting good times ahead in 2004, with more opportunities in the startup sector. This week, in fact, the National Venture Capital Association provided a list of generally sunny prognostications by its members for the 2004 venture funding climate.

This could be good news, because if VCs are funding, then startups (and their competitors) will hire more talent, and that will mean fewer layoffs and more jobs.

Well, maybe.

Mark Heesen, president of the NVCA, provides an important sound bite: "While we expect investment levels to remain steady in 2004, the year will be incredibly dynamic in terms of the industry doing much more with less."

"Doing more with less" isn't just a throwaway line from Headcount's bachelor days – it really does have a meaning for how startups are built and run these days. So we offer this prediction for the telecom workforce in 2004: There will be an increase in companies started and services performed, and but not necessarily in the number of folks employed.

While you ponder that, we'll go ahead and lay out a few notable hirings and firings from the past couple of weeks:

  • Just lucky, I guess: Jung Hong-shik has taken the top job at Dacom Corp., replacing chairman and chief executive officer Park Un-suh, the companies announced last week. Jung was formerly president of LG Group's telecom business division. Dacom, one of South Korea's largest telecom operators, is but one of LG Group's 50 affiliated companies. The conglomerate used to go by the name Lucky Goldstar, which Headcount finds terribly amusing, though not really relevant to Mr. Hong-shik's job change.

  • A plague of locusts: By the time Vitesse Semiconductor Corp. (Nasdaq: VTSS) completes its acquisition of Cicada Semiconductor Inc., Cicada will have cut its workforce to about 40 employees, most of whom will be working in product development, Vitesse announced Monday (see Vitesse Buys GigE Ammo). A Cicada spokesman told Byte and Switch that there are more than 50 Cicadas employed at the moment. A more exact number was tough to nab, however, considering that all the senior managers of both Vitesse and Cicada are off this week.

  • Just axing: Headcount has received tips that Azanda Network Devices cut anywhere from 10 percent to 30 percent of its staff as it closed its recent funding round (see Azanda Moves On). What happened? We're not sure yet. According to its PR firm, Azanda's managers can't be reached for comment this week.

  • It's for you: The CEO and chairman of U.K. retailer Carphone Warehouse will give 2.5 million shares and 1.75 million shares, respectively, to some of their company's top managers as a holiday incentive, according to a report in the Financial Times.

  • Mail call: "In the November 11 column (see Headcount: Numbers Games ), you wondered if Emperative Inc. was shutting down," writes one Headcount reader. "I can't say anything that might be construed as 'disparaging' because I signed a severance document prohibiting it, but I can say:

    • [The Website] www.emperative.com isn't up anymore;
    • If you call the engineering office, the line's disconnected; and
    • My last day on the payroll was November 14th... and I wasn't fired."


    And here are some further appointments, disappointments, and other employment-related headlines from the past several days:

    That's all for this... year! Thanks for making Headcount the most widely-read semi-regular telecom employment column on Light Reading. While we pop the seal on a fresh box of wine and ponder how we can do more with less, we hope you'll keep those news tips coming to [email protected].

    — Phil Harvey, Senior Editor, Light Reading

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    OpticOm
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    OpticOm,
    User Rank: Light Beer
    12/4/2012 | 11:08:06 PM
    re: Headcount: Less Is More
    A friend of mine, who was laid off from Azanda, told me that after they got money, in dollars, I suppose, not rupies, they axed people in the Bay Area and hire now people in India.
    For how long will we allow this kind of bs to happen?
    lightbulb0
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    lightbulb0,
    User Rank: Light Beer
    12/4/2012 | 11:08:05 PM
    re: Headcount: Less Is More
    There is nothing wrong with relocating jobs to India. I am sure the company did consult each laid-off about opportunity relocating to India. Whatever works well for the capital works well for the company or the capitalism.
    lightfantastic
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    lightfantastic,
    User Rank: Light Beer
    12/4/2012 | 11:08:03 PM
    re: Headcount: Less Is More
    Azanda has been brokering the India development office for over six months now, this should be of no surprise to anyone at the company.

    -l
    OpticOm
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    OpticOm,
    User Rank: Light Beer
    12/4/2012 | 11:08:00 PM
    re: Headcount: Less Is More
    Maybe you should relocate to India too...
    chipsischips
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    chipsischips,
    User Rank: Light Beer
    12/4/2012 | 11:07:54 PM
    re: Headcount: Less Is More
    What's amazing with this layoff is that it did not happen MUCH sooner. The company has raised $43M to date, and I would be surprised if the current valuation is even $20M (which is good in this environment) even with their Tier 1 design wins. Deals like the $66M Cicada acquisition are the exception, not the rule.

    As Ken Lawler from Battery Ventures was recently quoted, "the fabless semiconductor market for start-ups is broken." With most recent acquisitions going in the $5-10M range, the VCs are now just looking to get pennies on the dollar rather than nothing from their existing investments. New fabless start-ups (if there is such a thing) will need to get to be cash flow positive on $10-15M. Sounds difficult? It is! Welcome to the new reality.
    sigint
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    sigint,
    User Rank: Light Beer
    12/4/2012 | 11:07:51 PM
    re: Headcount: Less Is More
    Maybe you should relocate to India too...
    _________________________________________________

    Well, I'm in India, and have never been employed in the US. But maybe the adventurous among US (even those not of Indian origin) - can consider a brief stint in India. Frankly, the best minds from India over the last two decades had chosen the greener pastures of the west. There's a shortage of senior engineers and credible engineering managers out here.

    Pay might not be as bad as you might have been led to believe - even if you compare in US dollar terms. It would most certainly surpass unemploymnet benefit that you might receive in the US, and handsomely so. Of course, this happens only at the senior levels. The ratio between US and Indian pay at the junior levels is a joke.

    Already, many American managers spend substantial amounts of time in India managing their subsidiaries. Most that I know don't seem to be complain too much, some actually seem to relish the experience. Of course, it *could* be that they maintain such appearances out of politeness.
    sigint
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    sigint,
    User Rank: Light Beer
    12/4/2012 | 11:07:50 PM
    re: Headcount: Less Is More
    New fabless start-ups (if there is such a thing) will need to get to be cash flow positive on $10-15M. Sounds difficult? It is! Welcome to the new reality.
    __________________________________________________

    I'll have to second that. In addition to what has been stated, fab capacity has diminished internationally through the downturn. TSMC is running full steam, and the lack of capacity has emerged as a risk factor for even their new customers. The cost of prototyping a chip is only likely to go up.

    The likes of Intel shall benefit - ample fab capacity, created through the downturn at a very reasonable levels of investment.
    startup_shutup
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    startup_shutup,
    User Rank: Light Beer
    12/4/2012 | 11:07:41 PM
    re: Headcount: Less Is More
    I would relocate to India if I know what kind
    offer I would get:

    * Salary
    * Medical/Dental/Vision
    * PTO
    * Pension
    * Toilet paper (stock option)

    Could you please elaborate?
    india_engg
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    india_engg,
    User Rank: Light Beer
    12/4/2012 | 11:07:40 PM
    re: Headcount: Less Is More
    >I would relocate to India if I know what kind
    >offer I would get:

    Depends on your experience and skill set. Lets say
    you have 10 years of experience and are an engg. manager for a telecom vendor in the US - you are probably making around $120k per annum. Now, lets say you move to Bangalore. This is what you should expect

    >* Salary
    $50k/annum. But living expenses are around 1/4 to 1/5 of the US.
    >* Medical/Dental/Vision
    Covered.
    >* PTO
    I am assuming PTO is paid leave. 30 days/year.
    >* Pension
    None just like most companies in the US. There is an equivalent of 401k called PPF. Unlike the 401k though, you have to keep your money with Govt. of India and they gaurantee you a 9% return on your investment. Not sure if non-citizens can avail of this.
    >* Toilet paper (stock option)
    Equivalent to what you would get in the US.

    >Could you please elaborate?
    Hope this helps.
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