Hatteras sheds 25% of staff in 'best quarter ever'

Hatteras Networks shed about 25% of its 80-person workforce today, including two vice presidents, to prepare for economic turmoil next year, the company’s chief executive officer, Kevin Sheehan, confirmed to Telephony.

The Ethernet-over-copper equipment vendor made the move in response to general economic indicators of a harsh 2009 despite a lack of trouble signs within its own business. In fact, Sheehan said, “This quarter, Q4, is looking to be the best quarter in the history of the company. But we look at the news every day, and it seems like the world’s going to come to an end next year. And it would be fiscally irresponsible of us, knowing that we sell to some of the largest carriers in the world, to think that they are going to be unaffected.”

Sheehan expects Hatteras to see more than 100% growth this year and said he has no visibility toward any declines in 2009.

“[Carriers] are not telling us that they’re cutting way back on spending,” Sheehan said. But more generally, capital markets are drying up, he said, and when that happens, carriers tend to delay new infrastructure upgrades and deployments.

Hatteras is not seeing softness in the small and medium business space, which makes up a large constituency of the end users of its technology. (Other vendors and providers have reported a mix of sentiments about the current state of the SMB market.) However, Sheehan pointed out that Cisco reported a dramatic order decline in October and warned of rough waters to come in 2009.

Sheehan likens his business today to the calm scene in Galveston Beach, Texas, the day before it was hit by Hurricane Ike. “Sometimes, the day before [a hurricane hits], you have the most beautiful day you’ve seen,” he said. “But when Jim from the Weather Channel is telling you that a Category 5 storm is coming to you by tomorrow afternoon, you really have to listen to that or you’re going to be a casualty rather than somebody who safely rides out the storm.”