WaveSmith makes cuts, awaits cash
 
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Multiservice edge switch start-up WaveSmith Networks laid off 12 employees last week, or 10% of its workforce, in an effort to conserve cash as it rounds up investors for a third round of funding.
The workforce reduction brings WaveSmith's employee count to 102, just about the size investors look for from their start-ups, says Bob Dalias, WaveSmith president and CEO.
"The standards being requested of all start-ups are to manage burn and run with about 100 people," Dalias says. The staff cuts were made "not out of desperation but were a business management decision."
Dalias says WaveSmith is looking for $15 million to $30 million from this new round of funding. The company has raised $54.5 million to date from Atlas Venture, Bessemer Venture Partners, Fidelity Ventures and five other investors.
Dalias would not disclose WaveSmith's burn rate - how much money the company spends per month or per quarter to operate - but said it's in line with investor expectations.
The company is currently shipping its Distributed Node (DN) ATM switch and is on schedule to ship its DN frame relay switch in May, he says.
Another multiservice switch start-up, Equipe Communications, cut 25 staffers recently as it prepared to announce $40 million in new funding.
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