Cisco to cut 5,500 jobs globally, India may feel the heat

New York: US-based networking giant Cisco Systems will cut about 5,500 jobs, representing nearly 7 percent 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 percent to USD 12.6 billion for the quarter ended July 30, 2016.

"The restructuring action will impact up to 5,500 employees, representing approximately 7 percent of our global workforce. We will take these actions starting in Q1 of fiscal 2017," Cisco EVP and CFO Kelly Kramer said on a conference call.

She added that about USD 325-400 million of the pre-tax charges (of the total up to USD 700 million) will be recognized during the first quarter of fiscal year 2017, with the remaining amount recognised during the rest of the fiscal.

The company's net profit, however, increased 21 percent to USD 2.8 billion in the said quarter.

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 Americas and Europe, the Middle East and Africa (EMEA) was up three 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".

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.

Cisco has invested USD 1.4 billion in India since 2005, along with USD 100 million invested towards innovation in country digitisation and USD 280 million in funding/acquiring companies in India. It has also announced its intent to manufacture in India.

The company, which is engaged with over 10 Indian state governments on digitisation projects, has six innovation labs and three Centres of Excellence in the country.

The labs and CoEs in India are working in areas like smart cities, Internet of Everything (IoE), cybersecurity and next gen digital technologies.