Cisco systems cuts down 7pc of its workforce — India to face the heat of another big layoff ?

Cisco Systems, the US-based networking giant, will cut about 5,500 jobs, representing nearly 7 per cent of its global workforce. The move is also expected to impact operations in India, which is its second largest site with 11,000 employees.

The company, however, hasn't divulged how the global job losses would impact different geographies including India. Cisco, which employs about 73,000 people worldwide, has warned against a 'challenging macro environment' as its revenue fell by 2 per cent to $12.6 billion for the quarter that ended July 30, 2016. Cisco EVP and CFO Kelly Kramer on a conference call said,

The restructuring action will impact up to 5,500 employees, representing approximately 7 per cent of our global workforce. We will take these actions starting in Q1 of fiscal 2017

She added that about $325-400 million of the pre-tax charges (of the total up to $700 million) will be recognised during the first quarter of fiscal year 2017, with the remaining amount recognised during the rest of the fiscal year. The company's net profit, however, increased 21 per cent to $2.8 billion in the said quarter.

Cisco has been investing in new products like data analytics software and cloud-based tools for data centres to offset the impact of sluggish sales of network switches and routers. It follows July-June as its financial calendar. Its revenues from India saw a significant jump at 20 percent, even as those from emerging markets declined 6 percent.

Cisco India has now seen nine straight quarters of growth starting from the fourth quarter of 2013-14 (18 percent) to the current quarter.

Total emerging markets declined 6 percent with the BRICs plus Mexico down 2 percent. India was up 20 percent, while we saw declines in China of 12 percent, Kramer said.

Revenues from the Americas and Europe, the Middle East, and Africa (EMEA) was up 3 percent each, while it declined by 2 percent in the Asia Pacific, Japan, and China.

Cisco CEO Chuck Robbins said the restructuring will help the networking giant to "optimise cost base and lower growth areas of portfolio and further invest in key priority areas, such as security, IoT (Internet of Things), collaboration, next generation data centre, and cloud."

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