Headcount: Buddy Can You Share a Line?

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rjmcmahon 12/4/2012 | 11:24:53 PM

re: Headcount: Buddy Can You Share a Line? I'm not opposed to your desired perspective, i just find it unrealistic at its core

Why do you feel this way? Is it really too hard to believe that our purposes go beyond the acquisition of money? Remember, companies are little more than us and hence they reflect us as we reflect them.

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firstmile 12/4/2012 | 11:24:52 PM

re: Headcount: Buddy Can You Share a Line? Definitely good guys...
I heard that this appeared in a local newspaper. Anyone see the story?
...first

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opticalweenie 12/4/2012 | 11:24:50 PM

re: Headcount: Buddy Can You Share a Line? Dave,
What's the point of getting something in writing?
Hasn't Phil just recently shown us the futility
of this approach - I mean the NDA's his "sources" signed when they joined the DISA GigBE fiasco.
Weenie

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fairhearing 12/4/2012 | 11:24:49 PM

re: Headcount: Buddy Can You Share a Line?

Yes. It is in Santa Rosa's Press Democrat
newspaper. check out their business section

www.pressdemocrat.com

Is anybody hiring in Wine country ?
What are all the 1000s of guys who
got RIF'd in the last 2+ years
doing in the wine country ?

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light-headed 12/4/2012 | 11:24:47 PM

re: Headcount: Buddy Can You Share a Line? Is anybody hiring in Wine country ?
What are all the 1000s of guys who
got RIF'd in the last 2+ years
doing in the wine country ?
---------------------------------

isn't that obvious? they are drinking wine... lots of it! ;)

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sevenbrooks 12/4/2012 | 11:24:46 PM

re: Headcount: Buddy Can You Share a Line?
light-headed,

Well, from living in Telecom Valley answers:

1 - Not really. There is and has been some small scattered hiring.

2 - All types of things. Some people got jobs locally. Some people got jobs out of the area and commute. Some people have left the industry. Some people have left the area.

seven

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sevenbrooks 12/4/2012 | 11:24:45 PM

re: Headcount: Buddy Can You Share a Line?
I think you guys are confusing what is going on with what management teams would like to do and the realities that face them. Lets do a short time-line walk to remind ourselves.

Late 90s-2000. After Cerent is bought, a flood of new startups are made. Many of these startups are addressing the same market. Also, they are directed to be set up to be bought by (one of Cisco, Lucent, Nortel, Alcatel, Siemens, Erriccsson, Nokia). This means build a huge staff and include functions that are downstream and are needed later.

*Note: Many employees jump from stable jobs to these startups looking to make their fortune. In those days, many people assumed that all startups would get bought for Billions.*

Late 99-2000. Bubble bursts. Most companies rush to get bought or IPO to get the value to the investors. The product is still not done, but some bubble acquisitions are made on an xMillion dollars per engineer basis.

2001 - 2002. The burst hits home. Depending on where you needed money in that cycle you had it bad, worse or horrible. CAPEX is collapsing. A whole sector of customers has dissapeared (I recall talking to one company that insisted that their box needed to backhaul voice traffic out of the CO to the RBOC Class 5). Part of the requirement to get more funding is to cut back on the run rate of the business (i.e. lay people off).

At this point the first version of the product is done or close to done. So, as Management do you:

1 - Lay off Engineers and kill or slow future versions?
2 - Lay off Sales and Marketing folks and ensure you will get no revenue?

Now, at the beginning of this period people still thought big companies were going to do lots of buying. Later in the period, people are stretching these companies to see if they get any "traction". Then, they might be rescued at a low value but at least rescued.

2003 - Pretty much not a lot of change. Very little movement on revenue or cost so people go through another round of layoffs. Money still flows to some and a few are picked up. Lots of shutdowns.

So, how did this go wrong? LOTS of blame everywhere....

1 - VCs - Insisting that companies get big fast to be bought for $1B+ by a big company.

2 - Management - Taking that money and building the company that way instead of a sensible growth model.

3 - Employees - Joining a lot of "Me too" startups in a get rich quick scheme.

There was plenty of greed everywhere and just about everybody got infected. Just to give you what can happen when you don't do that look at Adtran today. No M&A during the bubble and they were modestly (by comparison) valued. They ran a nice, tight profitable business during the bubble and the downturn. Now they are richly rewarded for having done a sensible thing. There are a few other companies out there in the space like that. Few is the operative word.

So, do I think there is an ethical problem? I suppose yes. Do I think this group or that group is to blame? No, I think there is plenty of blame to go around.

I mean seriously. How many of you that worked on the 70 or so Metro Optical boxes didn't realize that maybe 1 or 2 of you would survive for real? Didn't you notice the sheer number of folks going for the space? It took no genius at all to see that this was a train wreck waiting to happen. But a LOT of people jumped on board waiting to cash their golden ticket.

seven

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crapshooter 12/4/2012 | 11:24:41 PM

re: Headcount: Buddy Can You Share a Line? With regards to the posts stating that engineers are the first to go during layoffs, my company is an exception. Where I work, administrative people (basically anyone who isn't an EE: accounting, sales, marketing, IT, shipping, etc.) are the first ones to go. I have heard the CEO say that non-engineers are completely expendable. So, we have no shipping or marketing departments now, but he has kept on engineers that haven't done doodly-squat since day one.

We are fortunate enough to have some of the most brilliant engineers in the industry. But, the CEO can't fathom letting go of some of the bad eggs since they have PhD's. It just doesn't make sense to me. Many of these startups are run by people who have no experience running a business and it shows.

CS

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rjmcmahon 12/4/2012 | 11:24:41 PM

re: Headcount: Buddy Can You Share a Line? Many of these startups are run by people who have no experience running a business and it shows.

Sometimes I wonder if the lack of business experience is really the missing ingredient. What business experience did Dave Packard and William Hewlett have when they started what used to be known as HP?

Beg's the questions, "Can any group in today's society build something like Mayo Clinic or DuPont? Or is naming venture funds after old growth trees the best SV can do?"

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firstmile 12/4/2012 | 11:24:40 PM

re: Headcount: Buddy Can You Share a Line? Seven,
Love your summary and the points that you make. My only argument would be that I'm not sure that it is an ethical problem. The rules and objectives of a VC-funded company are typically pretty well understood. However, in the bubble days folks (especially newbies), tended to only look at the upside potential and not the downside.
...first

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