Cisco likely to go for another round of global lay-off

Move may not impact India staff base

With global reports indicating that networking major Cisco is planning another round of lay-off, industry watchers have started evaluating its possible impact in India, the country where the San Jose-headquartered company has huge employee base. Like the previous times, industry experts and insiders believe that the impact of the proposed lay-off would be minimal or even it may boost the Indian presence.

According to a report published by technology news portal CRN, Cisco Systems is laying-off about 14,000 employees, nearly 20% of its global workforce. The cuts are expected to happen within the next few weeks, the report said citing unnamed sources, as the company transitions from its hardware roots into a software-centric organization.

 

"They need different skill sets for the software-defined future than they used to have. In theory the addressable market could be higher and margins richer, but it will take some time to make this transition," the portal said. The portal also said that many early retirement package plans have already been offered to employees.

Although it could not be independently verified, sources consulted by Business Standard said that the (lay-off) numbers may be lesser.This is not for the first time that Cisco is in news for staff retrenchment. In August 2014, the company had announced to lay-off up to 6,000 employees or about 8% of its global workforce. Similarly, in 2013 it laid off 4,000 employees and in the previous year around 1,300. The maximum numbers of retrenchment happened in 2011, when 6,500 employees were asked to go. However, none of these has any serious impact in India as its manpower base in the country has steadily grown from around 1,200 in 2007 to around 11,000 at present.

A company spokesperson declined to comment for the story. "We are in our quiet period and Cisco does not comment on rumour or speculation."The company is however expected to clear the air during its earning call early on Thursday.

Apart from a talent base, India is also a growing market for Cisco, where the company has been consistently growing for its products and services. During the past eight quarters, the company has shown steady growth in the country while in terms of market share in India, Cisco leads in seven out of the enight segments in operates.

Apart from Cisco, two other big software companies, Microsoft Corp and HP Inc, have also announced job cuts this year.

Microsoft said in July that it would lay-off about 2,850 jobs over the next 12 months, taking its total planned job cuts to up to 4,700, or about 4% of its workforce. HP Inc said in February it would cut about 3,000 jobs by the end of FY16.

In the recent past, Cisco has seen few top level exits in India including Joydeep Bose, managing director, Cisco Investments in Asia Pacific Japan, who quit to become a venture capitalist.