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Employment

Headcount: Time to Punt?

Fresh from a serene weekend of watching football, Headcount is ready to run down the most interesting hirings and firings of the past week:

  • Yafo Networks will shut its doors for good on January 21, according to a letter sent to workers regarding Yafo's corporate-sponsored 401K program. Since its inception, Yafo had raised $61 million in funding to solve the problem of polarization mode dispersion (PMD) on ultra high-speed networks. At its peak, the startup had more than 100 employees.

  • Atoga Systems has confirmed that it cut more than 20 workers last week, bringing its staff size down to about 31 people. P.G. Menon, Atoga's VP of marketing, says Atoga is restructuring and has three options: It can seek more funding, look for a buyer, or liquidate its assets. Menon says his team will know soon if the end is really near. "We aren't quite at the point where we need to liquidate. We still have some time."

  • Tunable laser vendor Bandwidth9 Inc. has cut its staff to 49 and is looking for a buyer. "We are looking at several options," says Bandwidth9 CEO Hatch Graham. "One of them is M&A activity."

    He doesn't seem worried about potential takers. "It's not a question of interest; it's a question of whether they can afford us," Graham says.

    In addition, Bandwidth9 has consolidated its manufacturing in Fremont, Calif., closing down a facility in Atlanta. Bandwidth9's most recent round of funding was in September 2000 (see Bandwidth9 Raises $80 Million).

  • Edge router vendor Crescent Networks is winding down its business, according to a reliable source. Evidently, the company never recovered fully from its October 2002 restructuring, when it cut staff down to about 21 people (see Crescent is Waning). Our source says Crescent got some nods from European carriers, but booking the sales took longer than the company's cash would allow, and its venture capitalists opted not to keep it afloat. Crescent raised about $66 million in financing since its inception.

  • Optical switch maker Tellium Inc. (Nasdaq: TELM) cut its headcount by 130 employees, or 40 percent of its workforce (see Tellium Lays Off 130). In mid 2001, Tellium's roster had swelled to more than 500, but now it's back down to roughly 195. The company expects that, beginning in the second quarter, the job cuts will save it about $4 million a quarter in operating expenses.

  • Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) says it has made some changes in its sales staff as it moves to sales assignments based on channels and major accounts. Senior VP of worldwide sales Chris Simpson and VP of North American sales Phil Wonderley are out, the company says. Rick Ford has taken the post of worldwide channel sales, and George Oliver has taken the title of VP of North America sales; both report to Avici CEO Steve Kaufman.

  • Headcount was having a bowl of Puffins this morning when we noticed that Cirrex Corp.'s picture was on the milk carton. Folks have had a difficult time reaching anyone at the company for several weeks. The company's answering service invites callers to "leave a voicemail message on the company mailbox," but, unfortunately, the mailbox is full. Has the company gone the way of the Dodo?

  • How many folks are left at WaveSplitter Technologies Inc.? That's a question CEO Sheau Sheng Chen finally shed some light on: "When it's all said and done, we'll probably stabilize at around 50 people," down from about 60 now, he says. At one time WaveSplitter employed 303, according to some old Securities and Exchange Commission (SEC) filings.

    Here's a summary of other industry appointments (and disappointments) from the past several days:

  • Intel Promotes VPs
  • France Names New Regulatory Chair
  • WaveSmith Overhaul Ousts Founders
  • Polaris Picks Panditi as CEO
  • C&W Brings in Lapthorne
  • Russo Returns
  • Internet Photonics Hires Cable VP
  • Carlyle Hires Directors
  • DigiLens Shrinks Another 50 Percent
  • Transmode Steals Nortel VP
  • Acopia Appoints VP
  • Cedar Point Hires Wray West
  • Gigabit Optics Hires Sales VP That's all for now. If we missed anything, please send a tip to [email protected]. Until next time, we're counting down the days until we'll be back on the couch for more painted face fanaticism and football foolishness.

    — Phil Harvey, Marguerite Reardon, Pauline Rigby, and Craig Matsumoto, Senior Editors, Light Reading Larry, Monkey, contributed to this report.

  • patbenible 12/5/2012 | 12:34:30 AM
    re: Headcount: Time to Punt? They sold off some of the intellectual property, product lines and equipment to OCP Inc. But, from what I understand, Gore still has the Lompoc facility (origonally Optical Concepts). I was told that they sold it for about $5 Million. Gore took a big loss on this endeavor as their investment is estimated at well over $240 Million. Only a few people were let go and most were able to get into other jobs in the cabling group or into the Medical and Fabrics divisions of Gore. Rumor is that none of the top management were fired or held accountable for the loss. With their poor product offerings and lack of customer value for their electronic materials and EMI gaskets, I doubt if this is the last painful moment for this company.
    sirspoody 12/5/2012 | 12:45:35 AM
    re: Headcount: Time to Punt? Anybody have an update on Appian? Were the 40 brave souls remaining given notice to start looking?

    Their web site is frozen in time since June 10, 2002!
    Horse 12/5/2012 | 12:50:43 AM
    re: Headcount: Time to Punt? Marconi sells DWDM gear to British Telecom, Telecom Italia, Vodafone (Omnitel). Read their press releases.

    Thanks anyway, but I am familiar with their remarkable WDM success in Europe. You mention three of their largest customers; in fact they've sold their WDM gear to around 20 European carriers in all, putting them amongst the market leaders in that region.

    They have three WDM products; ..a long-haul one that is a clone of Corestream, LH1600, Wavestar 400

    What nonsense is this? Marconi's ULH product (known as "Solstis", a reference to the Soliton technology it incorporates) is not a "clone" of anything - it was a joint development by Marconi and a UK university, completely independent of any other vendor!

    ULH product which you reference.. has never sold (and I don't think it ever will), but the other certainly have.

    As I said in my previous post the ULH product has ONE paying customer, the Australian carrier Amcom/IP1.

    http://www.marconi.com/html/ne...

    Actually, they first sold it to the Aussies in Nov 2001..

    http://www.marconi.com/html/ne...

    ..and as its the world?s longest overland broadband cable link without regeneration, I thought you might have heard about it. Perhaps you should read their press releases :)

    This new link, now live, is the first alternative to incumbent Telstra's existing east-to-west coast link (which currently uses Nortel gear but they've been trialling the Marconi ULH for a year and they're impressed, a deal may come soon)

    Anyway, my point, which you missed, was how can they sustain the ULH product with only one customer, possibly two if Telstra pay up.

    All the sales have come from the regional product, the PLT/PMA stuff. The ULH has one customer, and the Metro PMM stuff has only BT (and I don't think thats being paid for yet)

    Most people seem to agree that the regional product is superb, if a little pricey, but the Metro and ULH can't survive this downturn for much longer..







    tweek 12/5/2012 | 12:51:03 AM
    re: Headcount: Time to Punt? Any CEO owes the shareholders the option of a buyout. Every CEO should hear out any and every offer and present it to the board no matter what the circumstance. Thats just good, honest business practice, anything less is in my opinion criminal.

    Ciena, Cosine & QuickEagle all have fairly good relationships with several large scale carriers, they tend to follow international standards very well and make good products, even when competing with each other. They all also have products that don't compete head-on. I doubt any of them are near to folding anytime soon. Another note is that all those vendors should be able to live off the sales of CPE/Premise devices alone, they dont just make carrier-grade solutions.

    With Packet-Over-Sonet, MPLS, multiple IPVPN solutions over all other protocols, the industry is poised to make another leap into purchasing from carriers. Once the carriers turn around, I think you will find that there are several small, medium and large scale vendors capable of delivering quality equipment for these purposes. My advice would be to look into the relationships vendors hold with not only domestic carriers but european carriers as well. You might be shocked by the international business.
    bigdaddy 12/5/2012 | 12:51:05 AM
    re: Headcount: Time to Punt? This sounds familiar.

    They don't care why you visit the site, They just want you to visit. How's the ad revenue?

    OK Scott, how about sharing with us in an introspective article, the status of LightReading?

    Details on the sites Web statistics and how they have changed with the down turn. Maybe throw in some quotes from the staff on how their work and attitude have changed?

    And don't give us the old line that you guys just report the news. That crap is for the major outlets. You are an industry specific WAG that sees the leading edge indicators, probably more reliably than most analysts.

    Throw us a bone.

    Bigdaddy
    Cheesy Guy 12/5/2012 | 12:51:10 AM
    re: Headcount: Time to Punt? Is it just me or is LR going downhill?
    I used to read interesting technical articles
    about optics and optoelectronics on here. Lately it seems like all the technical articles involve abstract arguments with acronyms that I dont know.
    Now I only check the site to see which companies are tanking, and to see people sniping at one another.

    vomonquan 12/5/2012 | 12:51:22 AM
    re: Headcount: Time to Punt? Go for another 2+ years? BULLSHIT.
    We just hired a few of their bright HW talents and more are coming and I know the inside story of Cosine. Forget that loser, it's dead! Imagime you remove the physical body (HW) , what remains is just the brain (SW), do you think anything will get done? Also their SW people are losers, talking about a retarded mind here.
    bluechip 12/5/2012 | 12:51:28 AM
    re: Headcount: Time to Punt? Does anybody have some information on their financial state...

    Bluechip
    zettabit 12/5/2012 | 12:51:30 AM
    re: Headcount: Time to Punt? Marconi sells DWDM gear to British Telecom, Telecom Italia, Vodafone (Omnitel). Read their press releases. These are not small customers.

    They have three WDM products; a regional one, a long-haul one that is a clone of Corestream, LH1600, Wavestar 400, and the plans for an ULH product which you reference. The latter has never sold (and I don't think it ever will), but the other certainly have.
    Horse 12/5/2012 | 12:51:32 AM
    re: Headcount: Time to Punt? European PTT long-haul spending goes to Alcatel, Lucent and Marconi

    Not quite. Marconi has only no paying customers for its ULH product in Europe, although BT and others have been trialling it forever. Its only paying customer is Australian.

    Marconi has just announced the closure of its ULH R&D site, but surprisingly no job losses - all are moving to another site.

    With ust one customer, surely it can only be a matter of time before they give it up?


    straight shooter 12/5/2012 | 12:51:38 AM
    re: Headcount: Time to Punt? Hey Steve, LR, what's going on here when someone has their identity stolen?!?

    Makes it just that much easier to sling (fallacious) mud...
    Fiberjake 12/5/2012 | 12:51:41 AM
    re: Headcount: Time to Punt? Real issue is that: WHO CARES?
    Tony Li fan club is getting smaller and smaller

    --------------------------------------------


    I agree.

    When will the layoffs begin ??

    Thanks
    Fiberjake
    deepciscothroat 12/5/2012 | 12:51:42 AM
    re: Headcount: Time to Punt? Guys
    somebody has hijacked my tagline
    I have nothing to say about Atrica.
    Other dct, rememeber dark alleys and lead pipes

    real

    dct
    zettabit 12/5/2012 | 12:51:43 AM
    re: Headcount: Time to Punt? Mizrahi founded Semrock back in early-2001 (www.semrock.com), where he is still CEO. They're still around as a nichy optical fiber/components company, but can't be doing too well given the lousy nature nature of the overall market.

    Victor was a smart guy who worked really hard to get what he did, and is a perfect anti-example to Willywilson's posts that not all people who cashed out at the peak of the optical bubble were crooks.

    Then again, he never lived in California.
    bigdaddy 12/5/2012 | 12:51:45 AM
    re: Headcount: Time to Punt? You are on the mark with your analysis.

    What ever happened to Victor Mizrahi? Outside of the 2000 press release I havn't heard anything.

    http://www.lightreading.com/do...

    Left with Ciena at $200 a share, what a genius!!

    Bigdaddy
    douggreen 12/5/2012 | 12:51:54 AM
    re: Headcount: Time to Punt? Light_Headed,

    You said: "Lucent spun it (YAFFO) off because ..."

    The two founders of Yaffo, Henry Yaffe and Frank Moody, both came from Ciena immediately prior to founding Yaffo. Henry was one of the key product archtects/developers of Ciena's long haul systems.

    It was ANYTHING BUT a spinoff of Lucent/Bell Labss technology. They did annouce a plan to work with Agere on reciever technology last year, but that was after the PMD compensation market fizzled. Perhaps you are thinking of another company?

    Yafos biggest problem was that their fate was tied to the acceptance of OC-768, which did not happen.

    PMD certainly was an issue with some routes at OC-192 rates, but it was not a large percentage of the routes. Most of the carriers just ran more channels of OC-48 for those cases, and Cienas system seemed to perform very well on fibers with PMD issues. OC-768 would have broadened the problem to more fiber routes and expaned the market.
    Turtle 12/5/2012 | 12:51:55 AM
    re: Headcount: Time to Punt? There were two MEMS fabs built in Taiwan expected to get "big upon big" orders from optic equipment vendor on MEMS based optical devices in a chip type MEMS such as optical switch, AWG, etc.

    The reality was that they got almost no business. Their supposed customers (such as LU, NT, Fujitsu, etc.) have no business themselves. Heavy capital investment with low return make they are in difficult conditions. Unlike low end passive components, Japanese companies don't view them as parters but danger competitors. Their lives are different stories.
    zettabit 12/5/2012 | 12:51:56 AM
    re: Headcount: Time to Punt? Deepciscothroat wrote:

    "Moved the company to Europe. Worldcom all over again with Euro carriers investing in startups planning to pretend to buy their crap, sell company to us and make money.

    We're not buyin' it."

    ==============================================

    Deepciscothroat,

    Your post is incomprehensible. Who/what are you talking about? Can you elaborate (or take up high school again)?
    Turtle 12/5/2012 | 12:51:57 AM
    re: Headcount: Time to Punt? After slow start, Japan's fiber optic to home finally speeding up. So far as I learned, most passive component business went to Taiwan. From a CEO's interview, reasons are:
    1. In past two years, massive layoff and factory shut down in US & Japan while Taiwan hang tough
    2. In the bloody recession, Japan communication equipment makers view US companies as danger competitors.
    3. No threat from Taiwanese companies to Japan (they can only get low price OEM work for passive component).
    4. Passive components' price collapsed
    5. The CEO's company, making passive component, despite recovered to business level of two years ago, still some way to break even (doing business with loss but choice to hang tough there).

    A possible similar danger condition can happen in US. Once new fiber optic network starts, equipment manufacturers will use bloody low price overseas OEM. Unless the volume reach old mania level, low cost rather than high tech dreamers will win.

    Overall, there are still too many players out there. Last year (2002), one passive component manufacturer in China offer US$3.99 per coupler. No, they don't use manual assembly, they assemble in China with self developed fully automatic equipment.

    deepciscothroat 12/5/2012 | 12:51:57 AM
    re: Headcount: Time to Punt? Moved the company to Europe. Worldcom all over again with Euro carriers investing in startups planning to pretend to buy their crap, sell company to us and make money.

    We're not buyin' it.
    runrabbitrun 12/5/2012 | 12:51:58 AM
    re: Headcount: Time to Punt? I'm hearing rumors about Atrica going through layoffs. Does any one know the details, or care to de-bunk the rumor?
    pipesoflight 12/5/2012 | 12:51:59 AM
    re: Headcount: Time to Punt? zettabit
    That was a good post but you jumped the gun. I was hoping to here from the "founder and VP" first. That's okay because he really answered the question if you read between the lines.
    fiber_r_us 12/5/2012 | 12:51:59 AM
    re: Headcount: Time to Punt? Good post Zettabit! While some of those items don't apply to my personal situation (ie. I can pay my mortgage without a job if I had to, and I wouldn't work for the big guys no matter what they paid me, amongst others), the point is that if your company is in a situation where you are running out of runway, you *will* consider aquisitions.

    No matter what the ego of the CEO, the board will vote on whether an aquisition takes place or not.
    God 12/5/2012 | 12:52:00 AM
    re: Headcount: Time to Punt? "You are an important player in your startup (VP). Would you outline the scenarios for which you (personally) would accept an acquisition bid?"

    Unfortunately, as a VP you will have no say in the decision, unless you sit on the board. And even then, you typically have only one vote. Want to bet how the VCs will vote?
    Light_Headed 12/5/2012 | 12:52:00 AM
    re: Headcount: Time to Punt? I think Yafo is the absolutely worst example of a startup. Maybe you have amnesia but all of Yafo's technology came from Lucent which ultimately came from Bell Labs. Lucent spun it off because the upper management in their infinite wisdom saw no future for PMD, which stills remain a key issue for carriers. At Lucent, it was one of the most profitable business units there, although small it was profitable. The people I know that worked there were offered to follow the product to Yafo but said no way. So, contrasting big and small offers no value here because without the big company, Yafo does not exist.

    Light_Headed
    ThouShaltNotJudge 12/5/2012 | 12:52:00 AM
    re: Headcount: Time to Punt? Nice post zettabit; both informative and entertaining. Can you (or anyone) comment on the influence that primary investors [typically] exact in matters of acquisition strategy/tactics?
    zettabit 12/5/2012 | 12:52:02 AM
    re: Headcount: Time to Punt? "You are an important player in your startup (VP). Would you outline the scenarios for which you (personally) would accept an acquisition bid?"

    ============================================

    A good real-world question.

    How about:

    - You know the inside story of all the product defects that will slow revenue ramp by 6-9 months until they are corrected.

    - You realize that there will not be any meaningful customer revenue commitments coming for another 12 months - its not even in their budgets!

    - You know you only have "x" month (insert relevant number of months) of cash left at the current burn rate before you run out of money.

    - Potential investors you are contacting for a 2/3/4/5th round are either (1) not returning your calls, (2) saying not interested, or (3) seeking to impose ridiculous liquidation preferences, milestone based tranches, job cuts (maybe even your own) and wash-out valuations

    - You want to continue having a job because you have a mortgage, a family, car payments, etc... and you know that in "x" months (see above) you don't have one anymore.

    - You'd love to have your stock options be worth something. Even $250,00 or $500,000 would look attractive right now, seeing you'd only have to pay long-term capital gains tax

    - Any big company, even Nortel, Lucent, Alcatel, etc... would offer greater job security, better severance, and the potential for you options to even gain value over time

    - Any large company could provide the resources to see your pet project through to fruition - hopefully

    So unless you are a real ego-maniac (and by the way, there ARE many of them out there), there are plenty of good reasons as a senior exec to favor an acquisition if anybody would be interested.
    Dr.Q 12/5/2012 | 12:52:03 AM
    re: Headcount: Time to Punt? >Does anyone know the situation of Cenix?
    >Are they still afloat and making transponders?

    They are still alive, but the number of cars in their parking lot is way down (typically 5-7 now). They had a large layoff before Christmas, and a 2 week shut down.
    pipesoflight 12/5/2012 | 12:52:03 AM
    re: Headcount: Time to Punt? fiber_r_us

    Educational Question:

    You are an important player in your startup (VP). Would you outline the scenarios for which you (personally) would accept an acquisition bid?
    zettabit 12/5/2012 | 12:52:04 AM
    re: Headcount: Time to Punt? Belzebutt,

    I'm sorry to correct you but the Qtera platform, OPTera LH4000, was TOTALLY cancelled. The teams in Boca Raton and Richardson were laid off or a few good people transferred elsewhere, the sites shut down, the executives (ie: Reg Wilcox) re-assigned, and the product development completely discontinued. Of course Nortel had sold some, so the customer story was officially "continued support, but no continued feature development". Genuity was the only real customer, and they essentially got screwed.

    As far as the OPTera LH5000, its originally incarnation as an 80 x 40Gb/s x 1500km OC-768 optical transport system, that is DEAD and buried a long time ago. OC-768 has no customer traction (ask Photonex), the economics sucked, and customers don't care about 3.2Tb/s capacity anymore. LH5000 is in low-mode life support right now as a next-gen line system to replace LH1600, but who knows if Nortel can sustain the R&D investment in the context of such a depressed long-haul market.
    yikes 12/5/2012 | 12:52:04 AM
    re: Headcount: Time to Punt? BobbyMax claims "Yafo Networks was not in a position to solve the PMD compensation problem. It is problem that cannot be succesfully addressed by Yafo or any other company except Bell Labs scientists. So punting was appropriate action. But this happened after the management and employees exhausted all the funds."

    That would be wholly incorrect. Yafo's compensator obtained certification in a Tier-1 domestic carrier. Bell Lab's version was more complicated, more costly, and a nice lab demo, but it failed in the same testing lab a few years ago. Yafo's problem was that the customer lab it gained certification in was part of Bernie's empire, so when Ebber's crashed and burned, so did demand.

    Start-ups were able to assemble talented, motivated engineers that could fully-address nasty problems better than the big boys by bringing incredible technical focus to bear. Yafo is an example of this, and succeeded technically where others failed by building an excellent technical team and attacking one problem with everything it had.
    pipesoflight 12/5/2012 | 12:52:05 AM
    re: Headcount: Time to Punt? fiber_r_us posted:

    I know of no startup that would not talk to a potential aquirer when approached. Now, one may say that the startup "wasn't looking", but that is a somewhat self-delusional view of things.

    Translation
    Everybody has a price. I would agree with that.
    fiber_r_us 12/5/2012 | 12:52:05 AM
    re: Headcount: Time to Punt? >Neither of those was cancelled.

    Uhhh, ok, if you say so... I'm not sure what else to call eliminating most of the staff and focusing those remaining on other projects... I guess they are still alive, technically.
    Belzebutt 12/5/2012 | 12:52:06 AM
    re: Headcount: Time to Punt? Nortel already abandoned the development in the ULH space by ditching the Optera 4000 (Qtera) and Optera 5000 products.

    Neither of those was cancelled.
    fiber_r_us 12/5/2012 | 12:52:07 AM
    re: Headcount: Time to Punt? I know of no startup that would not talk to a potential aquirer when approached. Now, one may say that the startup "wasn't looking", but that is a somewhat self-delusional view of things.

    The companies in question have all talked to potential aquirers.
    zettabit 12/5/2012 | 12:52:08 AM
    re: Headcount: Time to Punt? It'd be great if the OFC organizers could pump reduced dosages of the gas the Moscow police used to disable the Chechen hostage takers at the Moscow theatre. This way all the attendees can walk around in an opiate-induced daze that will cheer everybody into believing the optical industry is fine. And if people get too wildly optimistic and start signing funding deals for new optical start-ups right there on the show floor, then it becomes an easy matter to just crank up the gas dosage and kill off the entire industry in one fell swoop.

    As far as job fair at OFC, the laid-off people looking for jobs will be stampeding against the ones who still have jobs but are so insecure they're looking for another, all applying to the bare handful of companies that may actually be really hiring. I'm staying out of that mess.
    zettabit 12/5/2012 | 12:52:08 AM
    re: Headcount: Time to Punt? pipesoflight posted:

    "Another reason some won't be acquire is because management is in love with themselves and would rather ride the ship down rather than sell out. Believe it or not sometimes CEOs and top executives love the new found power and salary so much they would refuse to sell until the VCs step in and dictate the outcome."

    ===================================

    Interesting comment. Some of the guys at Innovance (Frodsham & Allen) definitely fall into the "love the new found power" categorization. It'll be interesting to see how they handle failure.

    As for Ceyba, they definitely fall in the "in love with themselves" category. Scott Marshall believes they have customer traction, Annis, although strong technically is clueless on market realities, their product management organization thinks they're king, and Fleury leads the "clueless" charge in terms of internally justifying their product fit to carrier needs and Ceyba's market traction. Again, there will be some highly dissappointed people at Ceyba within the next 6-9 months.
    Light_Headed 12/5/2012 | 12:52:10 AM
    re: Headcount: Time to Punt? Is anyone going to be there? The CareerCenter there should be quite interesting. I heard Fartronics is hiring. They are looking for people with GaAs experience :)

    Light_Headed
    pipesoflight 12/5/2012 | 12:52:11 AM
    re: Headcount: Time to Punt? fiber_r_us posted

    *ALL* startup companies are looking to be acquired (even if the execs don't talk about it).

    I think this "ALL" statement is a little strong. I would probably say that some startups have the potential to be acquire. This is why. Some can't or won't be acquire because of their technology, strategy or management. Another reason some won't be acquire is because management is in love with themselves and would rather ride the ship down rather than sell out. Believe it or not sometimes CEOs and top executives love the new found power and salary so much they would refuse to sell until the VCs step in and dictate the outcome.
    I am not saying Innovance, Ceyba, or Xtera is this way.
    fiber_r_us 12/5/2012 | 12:52:13 AM
    re: Headcount: Time to Punt? Bill Johnson said:

    >Xtera is not looking to be acquired.

    >They are in a position to take customers away
    >from the likes of Corvis, Ciena, Nortel, etc.

    Dude, step away from the crack pipe! *ALL* startup companies are looking to be acquired (even if the execs don't talk about it).
    pipesoflight 12/5/2012 | 12:52:15 AM
    re: Headcount: Time to Punt? I agree with zettabit and Bill on this synopsis for the near term future (2003 & part of 2004).
    All the startups that were using the new fangled ASICs, -p, and specialized chips dropped like flies in 2001-2002 (with more to come in 2003). This means that semiconductor vendors will continue to take a beating and reduce Capex numbers. I suspect that would further translate to a reduction in investments in R&D and acquisitions unless there is a compelling case otherwise (proven market need for something new).
    Take a look at Intel. They claim in 2003 they will cut Capex 20%. Some of that will be in new equipment and the rest in R&D.
    deepciscothroat 12/5/2012 | 12:52:15 AM
    re: Headcount: Time to Punt? Spoke with a guy that interviewed as VP of Product Management there and turned them down
    Procket is about to come out of stealth mode this quarter with a RANGE of products, not just a high-end core router.
    After the usual parades of product managers and other staff, they seem ready to roll
    Real issue is that: WHO CARES?
    Tony Li fan club is getting smaller and smaller
    Bill Johnson 12/5/2012 | 12:52:17 AM
    re: Headcount: Time to Punt? BobbyMax wrote:
    "Yaho Networks was not in a position to solve the PMD compensation problem. It is problem that cannot be succesfully addressed by Yafo or any other company except Bell Labs scientists. So punting was appropriate action. But this happened after the management and employees exhausted all the funds."

    Bobby,
    Bell Labs is not the end-all when it comes to research and solving technical problems. There are many successful, highly regarded and respected scientists and engineers in the Industry that have never worked for Bell Labs yet they have made remarkable contributions in advancing technology.

    You keep mentioning products and companies that do not have a viable market. Who then, and what products do you feel the market is "hot" for? Perhaps something put out by Bell Labs?

    A lot of times you post accurate items that people do not want to hear but at other times you simply ramble on like the old HarveyMudd poster with the "I love Lucent/Bell Labs" campaign. Give it a rest and go make some other poor acquisitions.
    Bill Johnson 12/5/2012 | 12:52:17 AM
    re: Headcount: Time to Punt? zettabit,

    Good post and pretty much dead-on, although most of the LR readers will refuse to hear or acknowledge the truth.

    One point that needs changing though is that any certain market is "locked up". There are no guarantees my friend and customer loyalty is out the window if they can get a better product/service for less money.
    axephantom 12/5/2012 | 12:52:17 AM
    re: Headcount: Time to Punt? The truth about Accelight is there is no webmaster, in fact the rumor as of today 1/15 is that they are closing for good. Too many high cost presidential suites and first class flights for dinners with kids burnt the remaining 10M they supposedly had on hand. Point of the matter is this: The product worked, they just had the wrong people driving the car....and the CEO switch was the biggest downfall, especially when 2 of the top inventors of this product resigned.

    Salut put put
    sundog 12/5/2012 | 12:52:18 AM
    re: Headcount: Time to Punt? Does anyone know the situation of Cenix? Are they still afloat and making transponders?
    lightmaster 12/5/2012 | 12:52:18 AM
    re: Headcount: Time to Punt? Bobby Max said: "Yaho Networks was not in a position to solve the PMD compensation problem. It is problem that cannot be succesfully addressed by Yafo or any other company except Bell Labs scientists."

    Yes, Bobby, Bell Labs scientists solve all the worlds problems in the lab, but it never shows up in any working products from Lucent. Other companies like Ciena (DWDM), Nortel (OC-192) and Cisco (routing) just have to limp along as they can.

    BobbyMax 12/5/2012 | 12:52:19 AM
    re: Headcount: Time to Punt? It is true that too many CEOs are punting and getting fired they move on to another company to punt. As long the United States companies have unfair, adhoc, and capricious hiring -- too many incompetent people would become CEOs of both large and small companies. They would keep punting and raping serially until the companies they rape is grounded. No other counttry in the entire world has so much unfair system of hiring and promotions. We are not hiring well educated and prestigous people for the top job. The US government does not believe in hiring people who have accomplishments. It is the other set of skils such as lying and cheating have become most important.

    Yaho Networks was not in a position to solve the PMD compensation problem. It is problem that cannot be succesfully addressed by Yafo or any other company except Bell Labs scientists. So punting was appropriate action. But this happened after the management and employees exhausted all the funds.

    Atoga Systems is not a very focused company and has moved in different directions. The company has no chance of having marketable products. They participitated in all conferences and told different stories each time. With the current number of people, there is no way they develop and market any product sucessfully. I am surprised that they have not punted. Probably some money is still left to spend.

    Although there is no appreciable market for tunable lasers, but there are about 15 companies in the tunable laser business. I do not think there is significant market for these products. It is time for them to punt.

    It appears that Crescent Networks is almost ready to punt. They want to utilize the last cent of the
    VC funds availavle to them. They have been working on the static routing in IP networks. The problem they were solving sems to be interesting. It is time for them to punt.

    Tellium is in the business of making all ioptical switches. Unfortunately, there is no market for optical switches. It keeps terminating employees while lkeeping the management intact. They may have to punt sooner or later.

    Avici is in the core router business. The demand for core router is soft. It may have to punt.

    It is not clear how Wave Splitter can maintain a viable and profitable business.
    capolite 12/5/2012 | 12:52:20 AM
    re: Headcount: Time to Punt? Procket is out actively recruiting sales people. Are they ready to make their run?
    Bandwidth_guy 12/5/2012 | 12:52:21 AM
    re: Headcount: Time to Punt? Anybody wan to weigh in?
    Bandwidth_guy 12/5/2012 | 12:52:21 AM
    re: Headcount: Time to Punt? Anybody know anything about this company? They are targeting 10Gb/s and 40Gb/s market. Is this still their focus?
    Bandwidth_guy 12/5/2012 | 12:52:21 AM
    re: Headcount: Time to Punt? Xanoptix supposedly got some large funding about 12 months ago. This should carry them unless it is based on progress payments and they have missed key milestones dictated by VC's terms for financing. Anyone know anything?
    CanMan 12/5/2012 | 12:52:23 AM
    re: Headcount: Time to Punt? I agree with you here although they have cut their burn. I beleive at their current burn rate and 100+ million in cash, they can exist about another 2+ years.

    Also, they are now have boxes in KDDI, Sprint, NTT and many other networks so I think they will survive but someone will acquire them.

    Cisco does make the most sense although it would fit nicely at Alcatel as well
    -------------------------------------------------
    Remember, Cosine has no debt , Just poor sales. Its the cash burn out which is killing them. They need a mother ship pretty soon.

    I think cisco will buy them for 300M+
    Cisco is weak in IP Services and delivery IMHO
    zettabit 12/5/2012 | 12:52:23 AM
    re: Headcount: Time to Punt? Alcatel
    Celion
    Ceyba
    Ciena
    Cisco
    Corvis
    Hitachi
    Huawei/FutureWei
    Innovance
    Lucent
    Marconi
    NEC
    Nortel
    Photonex
    Siemens
    Xtera

    All of these companies are targetting whatever the optical long-haul market is when it re-emerges. And as has been said on these posts, some of the target customers, such as AT&T, when they buy, buy BIG.

    Some, like Alcatel, Lucent and Nortel, have long-standing relationships and large installed base of existing WDM gear with the key large customers.

    Others, such as Innovance, Xtera or Huawei, offer either innovative new photonic network architures, or really low pricing.

    Others, such as Ceyba, Celion, Cisco, Corvis, well....they exist (Is this the curse of the "C"'s, with Ciena the exception?).

    However, there is no way there is a market to support all these players.

    North America is now down to a handful of meaningfully big optical long-haul customers - AT&T, Sprint, Qwest, Level 3 and marginal players such as Williams (out of Chapter 11), 360Networks (same) and Broadwing (FOR SALE). Wolrdcom is sort of between the two. And the RBOCs are still not yet real buyers of long-haul gear, with their plans for long-haul backbones still very much TBD. Some of these have so much excess capacity (ie: Qwest and Level 3) they are not going to need to do anything major soon, except some minor route adds here and there. And unless you are smoking the same high-grade bud that David Huber is, nobody believes the Federal government is a "market" in its own right. It is at best a large $100M - 300M customer that will be from a highly secure American supplier.

    Asia is a well locked-up market for Huawei, Nortel, Lucent and the Japanese suppliers, and European PTT long-haul spending goes to Alcatel, Lucent and Marconi. People like Innovance or Xtera will have to break a centuries-old "old boys" networks to crack any opportunity there.

    So please be careful to state the caveat that although the large carriers can spend BIG and potentially ensure the success of a long-haul supplier, they will ramp their spending slowly gated by eliminating their over-capacity, will be hard to rip from their established vendor base, and there is not a big enough pie to meaningfully feed the entire list above.

    So a few will starve to death. That means hunger pains (product ready, but no customer), then weight loss (lay-offs), then loss of mobilty (massive lay-offs), loss of eye-sight (lay off rest of sales team) and death (bankruptcy).

    If you put your ear to the ground, you can hear a lot of bones being gnawed on right now
    laserbrain 12/5/2012 | 12:52:24 AM
    re: Headcount: Time to Punt? >>How sure are you that they still have $125 million in the bank? I would think it would be way
    less than that by now.

    It could very well be less than that by now. My data is 3 months old and wasn't exact even then. That's what "almost" means. The estimate gives them the benefit of the doubt.
    lvezz 12/5/2012 | 12:52:25 AM
    re: Headcount: Time to Punt? >Called Cosine today to contact their marketing. >No one seems to answer. No replies to emails >either. Have they closed doors ?

    Not everyone has time to surf lightreading.com and answer stupid emails and posts...too bad, Im not one of them.
    Bill Johnson 12/5/2012 | 12:52:27 AM
    re: Headcount: Time to Punt? Xtera is not looking to be acquired.

    They are in a position to take customers away from the likes of Corvis, Ciena, Nortel, etc.

    AT&T and DISA are not the only customers available in this space. It is going to come down to a waiting game and whether or not Xtera can stretch their cash long enough or simply get another round.

    On another point, ditching Qtera was a bone-headed move by Nortel.
    fiber_r_us 12/5/2012 | 12:52:28 AM
    re: Headcount: Time to Punt? Nortel already abandoned the development in the ULH space by ditching the Optera 4000 (Qtera) and Optera 5000 products. I can't see them running out and buying Ceyba, Innovance, or Xtera.

    Lucent already has the Lambda Extreme ULH product (working or not)... I can't see them running out and buying Ceyba, Innovance, or Xtera.

    Ciena already has a ULH platform (maybe not as long as Ceyba, Innovance, or Xtera), but... I can't see them running out and buying Ceyba, Innovance, or Xtera.

    Corvis has the cash to last a while, but they also already have a ULH product, so... I can't see them running out and buying Ceyba, Innovance, or Xtera.

    All of these guys are chasing the only two significant RFPs out there: AT&T and DISA.

    AT&T has had a re-org and it is not clear if the RFP will ever make it anywhere anytime soon. This will absolutely kill any of the vendors focusing on T that don't have *deep* pockets (as in *hundreds of millions* to spare). Essentially, Ciena and *maybe* Corvis are the only ones with a shot at T, *if* T does anything at all. Ceyba, Innovance, and Xtera don't have a chance. T has already been burned by two failed startups recently and is not interested in a repeat performance.

    DISA will probably eventually buy something, but they will go with a tried-n-true US-based vendor (either Lucent or Ciena).

    Fiberjake 12/5/2012 | 12:52:29 AM
    re: Headcount: Time to Punt? Thank You for the information.

    Fiberjake
    oso 12/5/2012 | 12:52:29 AM
    re: Headcount: Time to Punt? It sounds like T-Networks is headed for the toilet too, another big set of layoffs there this week
    rpm23 12/5/2012 | 12:52:30 AM
    re: Headcount: Time to Punt? >Does anybody working at Nortel, Lucent, Ciena, >etc... hear anything about the possibility of >Innovance or Ceyba being looked at for >acquisition?

    Lucent already has LambdaXtreme. I wouldn't think it would be looking to acquire another company in that space.
    skeptic 12/5/2012 | 12:52:30 AM
    re: Headcount: Time to Punt?
    Only problem is that they are hiring the right
    people way, way too late. They put everything
    into hardware and the history of trying to fix
    that sort of situation at the end is not good.
    skeptic 12/5/2012 | 12:52:31 AM
    re: Headcount: Time to Punt? - $250 Mil raised
    - almost half remains
    - currently almost 400 employees
    --------------
    How sure are you that they still have $125 million
    in the bank? I would think it would be way
    less than that by now.
    fiber_to_toilet 12/5/2012 | 12:52:32 AM
    re: Headcount: Time to Punt? Maxxan and Giant Loop are hiring too ;)
    mugwhump 12/5/2012 | 12:52:32 AM
    re: Headcount: Time to Punt? Check out Force10 Networks (www.force10networks.com) They currently have a bunch of openings.

    Some companies will survive and prosper!
    laserbrain 12/5/2012 | 12:52:32 AM
    re: Headcount: Time to Punt? Here's the back-of-the-envelope ZCD (zero cash date) calculation for Procket:

    - $250 Mil raised
    - almost half remains
    - currently almost 400 employees
    - vast majority in Silicon Valley
    - in SV, 50 people ~ $1Mil/month. = $8m/m burn
    - this can be mitigated with stinginess and offshore but 400 people indicates the opposite. Plus Procket has some big bucks talent.
    - so call it $9m/m burn
    - That means 1 year give or take at this headcount.
    - At which time they'll need a $100milion run rate!! In this market!!
    - It sounds like they've got a trickle of revenue maybe happening soon.
    - Therefore Procket should axe >50% immediately.
    - That'll make it stretch long enough to make it to maybe ramp up sales.
    - Watch. The longer they wait to cut, the less future they have and less likely they will be to make it in the long run.
    beamryder 12/5/2012 | 12:52:33 AM
    re: Headcount: Time to Punt? This is obviously why they did the deal with Tyco [AMP]. Now the questions is do they have product to bring to market. Fiberlight alluded to some problems in qualification. Does anybody know??

    Could be an interesting company if they can pull it off.
    fiber_to_toilet 12/5/2012 | 12:52:33 AM
    re: Headcount: Time to Punt? No cosine just rejected a offer of 90+ Million and they believe they want to go alone. It was right on the part of cosine to turn down the fire sale.

    (Well done Mr.Goggiano! , Its the only smart move you made in last 6 months)

    I think cosine will survive. Probably a much attractive M & A will be more acceptable to share holders and investors.

    Remember, Cosine has no debt , Just poor sales. Its the cash burn out which is killing them. They need a mother ship pretty soon.

    I think cisco will buy them for 300M+
    Cisco is weak in IP Services and delivery IMHO
    curious_georgette 12/5/2012 | 12:52:33 AM
    re: Headcount: Time to Punt? My understanding is that Innovance is still hoping for something, anything from Qwest. They had been actively pursuing AT&T for a while but that never panned out.

    Head count is still in the 230 range. As zettabit wrote, massive layoffs are in order for this organization.

    I'm sure both companies would love to be bought out but would anyone really be willing to take a chance on either?
    whyiswhy 12/5/2012 | 12:52:34 AM
    re: Headcount: Time to Punt? When you said Lockheed, I thought you meant Kestrel and Centerpoint, but come to think of it, those guys came out of Sunnyvale. The nicknames are still just as appropriate however.

    Massively parallel will be done by AMP or any of numerous electrical connector companies who have the manufacturing technology to get the cost down. Brute force solutions. Never was worth VC investment.

    -Why
    zettabit 12/5/2012 | 12:52:34 AM
    re: Headcount: Time to Punt? RouterOttawa,

    Thanks for the info on Innovance. Those time frames seem to calculate just right based on their last raise and their expected burn rate.

    Do you know what kind of traction Innovance may be getting from potential investors, and whether they are contemplating any actions to reduce burn. At this point they need to be looking at 50% type lay-offs to ensure survival, otherwise they'll just hit the brick wall at 100 km/hr.

    Also, I heard Ceyba only has enough cash to survive until May/June at the current burn rate. Any news on them?

    Does anybody working at Nortel, Lucent, Ciena, etc... hear anything about the possibility of Innovance or Ceyba being looked at for acquisition?
    sundog 12/5/2012 | 12:52:35 AM
    re: Headcount: Time to Punt? Is that real Cenix is down to 5 people? The news paper said it was down to 40 people in December and had money for at least half a year.
    God 12/5/2012 | 12:52:35 AM
    re: Headcount: Time to Punt? Called Cosine today to contact their marketing. No one seems to answer. No replies to emails either. Have they closed doors ?



    I doubt it. They recently turned down a buyout offer and their stock is still trading on Nasdag
    Fiberjake 12/5/2012 | 12:52:35 AM
    re: Headcount: Time to Punt? Does anyone have information on how Procket is doing, cash flow, product completion, etc.

    Thank You
    fiber_to_toilet 12/5/2012 | 12:52:35 AM
    re: Headcount: Time to Punt? 2000 - Year of the IPO
    2001 - Bubble Burst
    2002 - Lay offs
    2003 - Shut downs

    Most the companies we see getting shutdown will be the companies which went on survival mode with heavy layoffs in 2001 & 2002. These Management hoped they would conserve cash & survive the downturn , but these folks are fast running out of cash , VC are NOT willing to throw good money after bad & no customers in horizon.

    The VCs can bring hot shot figure "5" CEOs , but they still wont be able to turn around unless the macro economic situation changes.

    For that,you need IRAQ war.



    Bill Johnson 12/5/2012 | 12:52:36 AM
    re: Headcount: Time to Punt? I'm not positive but I think they have an optical transceiver that is ready to ship if it is not already shipping.
    Bill Johnson 12/5/2012 | 12:52:36 AM
    re: Headcount: Time to Punt? "Didn't I hear they also had some kind of deal going on with Tyco? Any news on that?"

    I have no news on that. Sorry.
    gigglegrl 12/5/2012 | 12:52:36 AM
    re: Headcount: Time to Punt? Didn't I hear they also had some kind of deal going on with Tyco? Any news on that?
    gigglegrl 12/5/2012 | 12:52:37 AM
    re: Headcount: Time to Punt? Do they have a product to put into the commercial world?
    phaethon 12/5/2012 | 12:52:37 AM
    re: Headcount: Time to Punt? Potential markets are optical backplanes in high end computing; replacement of fiber harness in switches and routers; storage area networks, e.g., optical RAID architecture, etc.

    When (if) copper is pushed to its limit, optics must come in. Right?
    beamryder 12/5/2012 | 12:52:38 AM
    re: Headcount: Time to Punt? Don't know. Heard that they want someone with more of a commercial focus to drum up new deals.
    Bill Johnson 12/5/2012 | 12:52:38 AM
    re: Headcount: Time to Punt? zettabit wrote:
    "I really question the viability of all these long-haul DWDM vendors given how piss-poor the market will be throughout 2003, and given how many long-haul players there are targetting such a small market: Alcatel, Celion, Ceyba, Ciena, Cisco, Corvis, Fujitsu, Huawei, Innovance, Lucent, Marconi, NEC, Nortel, Photonex, Siemens."

    The number of transport companies has drastically declined over the last two years, especially in the Metro/Acess space (there were 500-600 start-ups in this space in 2000). Although there may still be too many in the long-haul space, there are a few that stand a chance to make a splash against the bigger players. One that stands out is Xtera Communications.

    Piss-poor throughout 2003? Thanks Nostradamus.

    The long-haul transport market may appear small in the overall number of potential customers but the market represented by these customers is huge. Yes, their spending has been down but that will change sooner than you think.
    gigglegrl 12/5/2012 | 12:52:38 AM
    re: Headcount: Time to Punt? Interesting given that Xanoptix has an executive search underway for a VP of Business Development.

    What happened to Hamster? He was the VP of Marketing and Business Development at Xanoptix.
    beamryder 12/5/2012 | 12:52:39 AM
    re: Headcount: Time to Punt? Gigglegrl writes > I heard Xanoptix was getting low on funds too. Heard only enough money until the second quarter.

    Interesting given that Xanoptix has an executive search underway for a VP of Business Development.

    What's up with this?
    capolite 12/5/2012 | 12:52:40 AM
    re: Headcount: Time to Punt? Marcy Richards as VP of Cable Sales?
    Half-Inch Stud 12/5/2012 | 12:52:40 AM
    re: Headcount: Time to Punt? What me worry...thanks all for the update on said companies.

    How about the status of:

    the old IBM optogroup
    Emcore (old MODE, Alvesta Notebooks)
    Sandia Knat Labs
    NTT
    Molex
    US CONEC

    ..we know the status of
    Infineon
    W.L. Gore
    Cielo
    Picolight
    tyco (old AMP, old Lytel)
    Zarlink (old Mitel)
    E2O

    Half-Inch Stud




    gigglegrl 12/5/2012 | 12:52:40 AM
    re: Headcount: Time to Punt? Teraconnect is down to 9 people and a 2 day amonth CEO! Which is still too much time for him to be there! I heard Xanoptix was getting low on funds too. Heard only enough money until the second quarter.
    Dr.Q 12/5/2012 | 12:52:41 AM
    re: Headcount: Time to Punt? Back in 2000 a number of hot-shots left Lucent's Opto division in PA (now TriQuint, recently Agere), moved 5 miles up the road and formed a set of opto companies loosely (and pejoratively) referred to as mini-Lucents.
    Agility mothballed their operation over the summer--keeping chip operations in California.
    OptronX went down last fall (JDSU bought parts of it at a fire sale price).
    Cenix laid off all but about 5 folks just before Christmas.
    T-Networks is struggling, but is said to be getting some market traction.
    Circadiant had a short write-up in this space in November, but is otherwise keeping kind of quiet.
    A 6th opto start-up in the same area, Opticalis, pulled its plug in the late summer.

    - Dr.Q
    darkone 12/5/2012 | 12:52:44 AM
    re: Headcount: Time to Punt? >So who is going to fill the void for massively parallel optics?

    I hope you wrote that in jest. The only market I see is for supercomputers. Am I missing something?

    I have heard a rumor that Xanoptix is Downsizing.

    Darkone
    RouterOttawa 12/5/2012 | 12:52:45 AM
    re: Headcount: Time to Punt? Does anybody have any scoop on where Innovance or Ceyba are in terms of financials?

    Word on the street has Innovance running rather short of cash in March/April.

    Also, the web master at Accelight needs to get up to speed ... many of the people listed at http://accelight.com/managemen... aren't there anymore.

    edgehead 12/5/2012 | 12:52:45 AM
    re: Headcount: Time to Punt? CoSine is definitely still around - they've got $100 million in cash. Don't know why they're not answering tho'
    arak 12/5/2012 | 12:52:46 AM
    re: Headcount: Time to Punt? Called Cosine today to contact their marketing. No one seems to answer. No replies to emails either. Have they closed doors ?

    Arak
    zettabit 12/5/2012 | 12:52:47 AM
    re: Headcount: Time to Punt? Does anybody have any scoop on where Innovance or Ceyba are in terms of financials?

    Given their last money raises over 12 months ago, and what are sure to be high burn rates given their company size, they must be hurting. Of interest would be what traction they are getting from investors for additional cash infusion to help them ride out 2003-2004, number of employees, and what actions they may be taking or contemplating in terms of headcount reductions or operating cuts.

    For that matter, does anybody have info on Celion or Photonex as well?

    I really question the viability of all these long-haul DWDM vendors given how piss-poor the market will be throughout 2003, and given how many long-haul players there are targetting such a small market: Alcatel, Celion, Ceyba, Ciena, Cisco, Corvis, Fujitsu, Huawei, Innovance, Lucent, Marconi, NEC, Nortel, Photonex, Siemens.
    vomonquan 12/5/2012 | 12:52:47 AM
    re: Headcount: Time to Punt? My friend was included in a massive blood letting by the brand new vampire CEO.
    Polaris is dead
    tookl4wrds 12/5/2012 | 12:52:48 AM
    re: Headcount: Time to Punt? Gore is gone. I called there recently to speak to a friend as was told they no longer work there. After a few calls I found out about the dispersion of the other employees. Dove Bid recently sent out an e-mail notification of an auction of the Lompoc and Pleinfeld facilities. The auction will be on Feb 6. We can all stock up on useless VCSEL IP.
    fiberlight 12/5/2012 | 12:52:48 AM
    re: Headcount: Time to Punt? Does anybody know what is happening with the Lockheed Sanders twins (spin-off and rip-off)?

    In the last postings from TeraConnect they were touting product and a new VP of Sales. A message board posting later said they were down to 10 warm bodies and shrinking.

    Last postings from Xanoptix said they had done a big marketing deal with Tyco but the latest news is that they can't qualify their product(s?) and Tyco is sitting with a sales bag full of hot air.

    So who is going to fill the void for massively parallel optics?
    BlueWater66 12/5/2012 | 12:52:51 AM
    re: Headcount: Time to Punt? Is Gore Photonics completely gone? I think there are still some people over there, but I've heard (and they said via press releases) that the Photonics group was shutting down in Oct/Nov.
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