Cisco this week announced it is laying off some 5,500 workers, about 7 percent of its global workforce. The firings fell far short of the 14,000 positions that had been rumored, but they still cut deep.
And it can’t help ease the sting that workers getting pink slips had to listen to Cisco CEO Chuck Robbins exult, “We had another strong quarter, wrapping up a great year.” That “we” doesn’t extend to the fired workers, obviously.
So, what’s really going on here?
Basically, Cisco is trying to keep up with fundamental changes in the world of infrastructure. Those changes take many forms, but the biggest, most obvious development is the incredible rise of cloud computing. Companies are scrambling to run every possible workload into the cloud, which is grabbing an ever-increasing share of new infrastructure investment.
The cloud giveth, the cloud taketh away
Not surprisingly, that epic shift is having a profound effect on the types of networking equipment that companies buy from vendors such as Cisco, as well as the kinds of companies that make up the switching giant’s customer base.
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In general, big cloud vendors such as Amazon Web Services, Microsoft and Google buy different kinds of equipment than individual companies running their own data centers. For one thing, they show increasing interest in generic, white-box hardware running open source or homegrown software, not the more expensive, often-proprietary solutions that earn vendors like Cisco fat margins.
Just as important, while cloud-based efficiencies do work to increase the overall market size, these companies simply don’t buy as much stuff as their customers would have if they had to supply all that computing power on their own.
Cloud-based job security fears aren’t new
Most evidence I’ve seen seems to suggest that, on balance, the cloud creates at least as many IT jobs as it endangers, but that doesn’t mean the disruption isn’t real and potentially very damaging to many individual careers. Cloud-centric jobs are often quite different than the on-premise and data center jobs they essentially replace, and not everyone is able to make the transition.
Historically, most of the concern was felt among IT workers in companies moving from on-premise data centers. But Cisco’s latest layoffs make clear that end-user companies are not the only places where the cloud is impacting jobs.
The cloud is a good thing, but…
I firmly believe in the promise of cloud computing. I’m confident that the move to the cloud is inevitable and ultimately desirable for the IT industry and its customers. But the fact that cloud computing is on the right side of history doesn’t lessen the pain for the people negatively impacted by changes beyond their control.
So, even as we celebrate the power of the cloud, let’s also take a moment to do what we can to help the folks pushed aside in the mad rush to the new new thing. If you have job openings, reach out to former Cisco workers—and others who lost their jobs through no fault of their own. If you work in the cloud, share your expertise. If you offer training courses, make them available at a discount to laid off workers—a deep discount.
Because while the cloud is clearly today’s red-hot trend, no one knows what tomorrow’s technology innovations will bring, and any one of us could be the one in need of a helping hand in a couple years.