Cisco quietly downsizing through outsourcing

Network management group reshaped by Cisco via "limited restructurings."

When Cisco celebrated the fifth anniversary of its New England Development Center last year - a ceremony attended by Massachusetts Congresswoman Niki Tsongas and a representative from Gov. Deval Patrick’s office - the company was quietly preparing to move several jobs from there and other locations to contractors in India and elsewhere, mostly in the company's Network Management Technology Group (NMTG).

In Cisco parlance, a "limited restructuring" was underway, under the radar.

These "LRs," as Cisco sources call them, are a way for the company to cut costs by reducing workforce in small, incremental moves without having to publicly announce or disclose the actions in compliance with U.S. Department of Labor regulations, like the Worker Adjustment and Retraining Notification Act (WARN). These specific NMTG LRs are separate from the planned reduction of 1,500 to 2,000 positions Cisco announced during its earnings call last month, which, the company says, complied fully with WARN and other federal labor regulations.

Enacted in 1989, WARN requires most employers with 100 or more employees to provide 60-day advance notice of plant closings and mass layoff of employees. Exemptions to WARN notifications include a plant closing or layoff that results in fewer than 50 workers losing their jobs at a single employment site; or if the number of employees losing their jobs is less than 33 percent of the employer's total workforce at a single employment site.

Cisco says it filed two WARN notifications in the past six months for actions at its San Jose headquarters and another for operations in Richardson, Texas. IBM reportedly skirted WARN notifications while incrementally reducing its North American workforce by over 4,000 employees.

Cisco says it has been restructuring the NMTG for up to a year. Sources within Cisco say as many as 128 positions from NEDC, Research Triangle Park, and Scotland were outsourced to Tech Mahindra in India during that time.

Cisco says the actual number is roughly 40 percent less.

"Cisco is constantly evaluating its business priorities, resources and overall employee alignment as part of our normal business process," the spokesman stated in an e-mail. "The restructuring activity in our Network Management Technology Group in November 2008 was part of an ongoing realignment of resources. The NMTG restructuring impacted less than 10 percent of the unit's workforce and was not part of the company's broader realignment and restructuring plans that were discussed on our fiscal second quarter 2009 earnings call on February 4, 2009."

Sources say Cisco vanquished another 87 positions at the NEDC that were involved in IOS software regression testing, development and maintenance of the 10000 series routers, and the new ASR 9000 router. Cisco claims less than half of those positions were impacted, and that none were outsourced -- the remainder were shifted to Cisco India and other company locations.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags outsourcingdata centrescisco

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jim Duffy

Network World
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?