Cisco to lay off 6,000 people

India could see job cuts

Networking solutions giant Cisco will lay off up to 6,000 employees globally, including India, after it reported a marginal decline in profits and revenues for the fourth quarter.

The reduction, which is about eight per cent of US-based firm's global workforce, follows a similar move by the company last year when it announced plans to slash 4,000 jobs.

Stating that the company must focus on areas of growth to become the number one IT player, Chairman and chief executive officer John Chambers said transforming Cisco requires "making some very tough decisions".

Cisco expects to record charges of up to $700 million in restructuring charges through financial year 2015.

People in the know of the development said that India would also be impacted by the lay-offs, as Cisco had a sizable workforce in the region.

Cisco, however did not comment on the impact on Indian operations.

The firm said: "Technology disruption has never moved more quickly, requiring all companies to adapt and accelerate through change. We are taking action now to build for the future of cloud, security, vitalisation, analytics, data centre, IoE (internet of everything) and collaboration." The firm will continue to invest in growth, innovation, and talent, while managing costs and improving efficiencies across the business, Cisco added.

"We are continuing to hire, especially in the areas that help our customers solve their biggest business problems," it said.

In India, Cisco employs over 10,000 people across cities like Bangalore, Delhi-NCR, Mumbai, Chennai, Kolkata, Pune and Hyderabad. Of these, 8,000 people are part of the R&D set up. Chambers in an analyst call said: "... we will announce our plans to do a limited restructuring across several areas of our business. These actions are focused on investing in growth, innovation and talent while managing cost and driving efficiencies.

"We expect to reinvent -- reinvest substantially all the cost savings from our restructuring actions in our key growth areas such as data centre, software, security, cloud and others."

Cisco Executive VP and CFO Frank Calderoni said the firm will be taking a restructuring action in FY 2015 that will be focused on continuing to invest in growth, innovation and talent while managing cost and driving efficiencies.

"These actions will impact up to 6000 employees representing approximately 8 per cent of our global workforce. We expect to take these actions starting in Q1 FY 2015 and currently estimate that we will recognise pre-tax charges to our GAAP financial results of up to $700 million," he added.