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

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

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.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?