Cisco to fire dozens of workers in Israel
American technology giant, which bought Israeli NDS 18 months ago, planning round of dismissals among company employees in coming days. Wave of layoffs in high-tech industry continues as Red Bend Software intends to cut 10% of its workforce
The two companies are expected to announce the dismissal of dozens of workers.
Calcalist has learned that the NDS layoffs are expected in the coming days and will focus, according to estimates, on administration workers and overlapping positions. A few development workers will likely also be fired.
The Red Bend dismissal plan is expected to begin within several weeks and include about 10% of the company's 250 employees.
Fears materialized 18 months after sale
In March 2012, when Cisco purchased NDS, which has 1,200 out of 2,000 workers in Israel, NDS executives refused to guarantee that there would be no layoffs in the company.
NDS COO Rafi Kasten had told Calcalist at the time that there was hardly any overlapping between Cisco and NDS.
As for the fear of dismissals, Kasten had said: "Both I and Jesper Andersen, who is in charge of the acquisition on behalf of Cisco, said that was not the plan. The whole here is greater than the sum of its parts.
"I myself am committed to staying in NDS. Israel is the core of the global company, and the 1,200 workers who grew up here are the foundation for more than 5,000 workers worldwide."
Andersen, senior vice president and general manager of Cisco's service provider video software, had told Calcalist at the time: "Cisco is committed to Israel and to the development sire in Jerusalem. We have a history of acquisitions in Israel and we see NDS not just as an acquisition of a product, but also of talent.
"We have no plans at the moment regarding the future of the development center, and it will take four to six months before we make a final decision."
Now, an year and a half later, the news of layoffs has arrived.
NDS specializes in end-to-end solutions, including conditional access software systems and interactive systems for digital television, digital pay-TV and set-top boxes. The company was purchased by the American technology giant for a huge sum of $5 billion.
NDS's sale is still considered the biggest acquisition of an Israeli company by an American technology firm, although at the time of the purchase most of NDS's shareholders were foreign, including Rupert Murdoch's News Corp.
According to estimates, the dismissals in Israel are part of a global move of layoffs in Cisco, but it is quite possible that this is not the last round Cisco plans to carry out in its Israeli subsidiaries.
Cisco CEO John Chambers visited Israel last summer. He spoke at the Presidential Conference and vowed to recruit 100 workers to the cyber field, a move Calcalist has learned is still underway. Last January, Cisco bought Israel's Intucell for $475 million.
Cisco declined comment.
Red Bend firing despite growth forecast
Meanwhile, the Red Bend software company is expected to cut about 10% of its workforce, which includes some 250 employees, in the coming weeks. The company did not respond to Calcalist's inquiry on the matter.
The decision to launch a round of layoffs in Red Bend is surprising in light of the fact that the company has experienced a clear momentum of growth in the past two years as one of the main suppliers of a software for remote upgrading of cellular applications and software, a technology which it supplies to cellular operators.
Today Red Bend serves international cellular producers like Korea's Samsung and LG, Chinese Lenovo, Huawei and ZTE, and American Intel and Qualcomm. Samsung, for example, has purchased a license for technology installed on Galaxy phones and tablets.
Red Bend held advanced negotiations for its acquisition by IBM about a year ago, as revealed by Calcalist. The talks failed, however, likely due to differences of opinion over the purchase price.
Meir Orbach contributed to this report
