Spinnaker Cuts Its Crew

Next-gen NAS startup Spinnaker Networks Inc. has laid off 20 percent of its employees -- leaving it with a crew of about 80 -- in an effort to slow its burn rate, Byte and Switch has learned.

But company executives say the move was just "prudent fiscal management" to cut back in areas like engineering and operations as Spinnaker gears up for an aggressive sales push in the year ahead.

On Jan. 14 the company, which at the beginning of the year had 100 employees, handed pink slips to 20, with the cuts concentrated in its engineering group. [Ed. note: Interestingly, though, it apparently didn't have an all-hands-on-deck meeting.] A source familiar with the company says Spinnaker's board of directors demanded the cuts to reduce expenses.

Jeff Hornung, Spinnaker's VP of marketing and business development, confirms the layoffs but says "it wasn't that the board said, 'Thou shalt' -- it was the management team making some prudent fiscal management decisions." The company made a similar fiscal management decision in December 2001, when it laid off about a dozen engineers in shutting down the development its own ASICs for accelerating NAS traffic (see Spinnaker Sheds Staffers).

Trying to put a positive spin on the news, Hornung says the staff reductions also help "accelerate the staffing mix from inbound engineering to more outbound engineering... We're still recruiting sales, service, and support for the rest of the year."