Cereva Cuts Twenty More

The revolving door at Cereva Networks Inc. took another spin this week, as the company laid off an additional 20 employees, reducing its headcount to 150.

The layoff comes in the wake on ongoing executive changes at the company (see Cereva Exec Churn Continues). It is the second major reduction this year and represents a cut of about 40 percent from staffing levels in May 2001, when the startup made its first job cuts (see Cereva: Stalled, Not Stopped).

The most notable departure from the storage switch startup was head of corporate communications Bruce MacDonald, who had been with Cereva since its founding.

Unfortunately, being one of the first employees isnt necessarily a good thing at Cereva these days, as the new management team, led by CEO Mahesh Ganmukhi, blames the old team for hyping Cereva’s plans long before the company was even close to announcing its product.

Snafus, such as the premature (and ultimately unfounded) declaration that GiantLoop Network Inc. was a beta tester, led to extremely high expectations. And the company had little to show its investors when it went for a second round of funding in the summer. It took Cereva until late September to close that round (see Cereva Gets $50M Funding). Subsequently, the company saw the departure of CFO Brian Cohen as well as the head of sales (see Cereva Skids to a Halt and Cereva's Back on Track).MacDonald’s replacement, Bob Rentsch, has been at Cereva about a month. He was previously part of the corporate communications group at NaviSite (Nasdaq: NAVI), a service provider that offers managed hosting and has the Cereva product on trial (for real!).

”The earlier management team was more aggressive in talking about futures, whereas the view now is: 'Let’s have real stuff to talk about; plans just don’t cut it anymore,' ” Rentsch says. This apparently goes for earlier revelations about the company's doings (see Cereva Details Storage Switch).

Under the old regime, Cereva had said it would be revealing the details of its product in early 2002. Now it’s saying this won’t happen until it has customers to announce. “We are simply being prudent in the way we tell the message,” said Rentsch.

Is the product behind schedule? It's tough to tell. In any event, the new regime is clearly placing blame on the old, and new faces at the company are attempting to establish new credibility.

The remainder of the layoffs were across the board, officials said.— Jo Maitland, Senior Editor, Byte and Switch
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