Tuesday, July 12, 2011

Cisco Sucks

While surfing I came across a news on ITpro website about Cisco, a worldwide leader in networking that it may eliminate as many as 10,000 jobs to maintain its competitiveness going forward. According to Bloomberg, Cisco is also providing early-retirement packages to about 3,000 workers who took buyouts.

However, the inside story is something different. As per news, India Country President Naresh Wadhva is said to be on leave from past three weeks which comes as a surprise as how can a country president be on leave at a crucial stage when the financial year of 2011 is ending on July 29. Isn’t it strange that at such crucial stage the country president of Cisco is enjoying holidays? By the way, the sources have informed that he has quit. Cisco has officially announced 17% lay off in India.
Including Anil Basin, Senior Vice President Sales and several other top and middle management level employees of Cisco are quitting due to sudden changes at ‘APAC” (Asia Pacific Countertrade Association). The changes have brought lots of insecurity and dissatisfaction amongst employees. On the other side, the arch rival of Cisco is taking advantage of this scenario and hiring best of the employees of Cisco team. To say, the over all scenario of Cisco in India is not so well. It seems that there is no security of job in Cisco India. Naresh Wadhwa worked for thirteen years in this company and he is the one who established entire India operations; but today he is been asked to quit just because he couldn’t manage to nod his head to managements unreasonable approach. Top management need shoe lickers in company and there are many who believe in their caliber refused to do so.

Newly appointed Edzard Overbeek, APCA head replaced Naresh Wadhva with his own source Janesh Murjani. Edzard had joined Cisco just two years back. Unfortunately, he and Naresh Wadhva had differences in opinion and hence couldn’t go well with each other. Obviously, Naresh is here from 13 years and he is well versed with market and business set up in India. Employees are waiting for Janesh to take charge, and there are probable chances that Anil Basin BSFI head, Jagdish Mahapatra- IT/ ITCS head and Shrikant Shintole – Real estate business head, Sandeep Raina- Government/ public sector head looking for their way out and may evict from Cisco. As part of its broader plan to cut costs and increase profits, the networking company may slash about 7,000 jobs by August this year. Earlier it was reported that Cisco might cut 5,000 jobs meaning a nearly 7 per cent work force reduction for Cisco, which has about 73,400 employees worldwide.

Cisco currently expects annual revenue to grow by 12 per cent to 17 per cent. Its share price fell by about 2 per cent at $15.43, in a market that was broadly lower due to concerns about the U.S. budget talks and the euro-zone debt crisis. With a view to meet its goal of slashing costs by $1 billion and lower its long-term revenue growth target to about 10 per cent from a forecast of 12 per cent to 17 per cent, Cisco may plan to trim its workforce. By laying of so much staff, cutting down other expenses and optimizing discount level may bring some financial stability to company, but if you look at the shares (IPO) flown in the market are just 10 % and 90 % shares are with are with Cisco CEO, John Chambers, if the revenue is not thrown in the market how one can expect the growth? If such International company terminates top old management level employees, what is the guarantee the new comers will pour in their heart towards growth in such critical situations? The elegant old staffs are panic; there are too many projects and not enough resources to execute. In order to be successful, management will need to take a serious look at the project load and make some tough decisions. However, it must be noted that Cisco's revenue has increased 11 per cent over the past five calendar years. While viewing this as a positive move, analysts believe the company needs to reset its long-term financial targets. Cisco had earlier shed some 8,000 jobs in 2001 followed by some major job cuts in 2002.

Cisco never hesitates about firing employees. Although labour in India is comparatively cheap than other nations, but the company’s strategy has been failing miserably. Even at this historic time for the company, almost no coherent message is being conveyed to the employees on how the company can recover from this downward twist. Cisco in definitely weak at management level and unsaid, unseen internal politics has always attacked the integrity of Company. Whenever this company came in crises the only solution they could come up with is lay off, may be this is the biggest reason that company is not growing the way it should be because it lacks job security. The state of upper-management at Cisco is absolutely appalling.

More over the CBI probe is another pain to Cisco. The Central Bureau of Investigation (CBI) has expanded its inquiry net to probe the role of original equipment manufacturers and network implementation partners involved in the Commonwealth Games communication deal, allegedly a highly inflated contract. CWG's communication, video and data transfer bribe/scam appears to be in range of Rs 350-400 crore. MTNL and Bharti Airtel were the only two bidders of this deal. CWG chief Suresh Kalmadi awarded the contract to MTNL, thinking no one would question him for giving work to a government body. MTNL manipulated the specifications and quoted a whopping sum of Rs 570.12 crore for it while Bharti Airtel wanted a nominal fee of Rs 10 crore but negotiated for branding advantage during the sporting event. Eventually, MTNL subcontracted the work to HCL Infosystems for Rs 380.04 crore. Later on HCL gave contract to Cisco for Rs. 180 crore. CBI’s question is that why and where Rs. 550 crore was invested for the job worth only Rs. 50 crore. Cisco’s top two legal department people are in New Delhi, dealing with this issue. The statestic over this issue are published in so many news papers, including Mint.

The unreasonable deals and mismanagement in admin may give big jolt to this biggest IT Company. At this moment Cisco is discussed on very appalling and sad notes amongst IT industry.

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