Huawei Can Help Cut 90% of Networks Operations Jobs, Says Senior Exec

Iain Morris
4/12/2018
50%
50%

Nine in ten network operations jobs could disappear in the next three to five years as automation gathers pace in the telecom sector.

That is by no means a certainty, but nor is it some hazy analyst forecast. Instead, it's what the world's biggest telecom vendor believes could happen if operators make the appropriate investments.

China's Huawei Technologies Co. Ltd. says it is working with several operators on projects that could lead to a dramatic reduction in headcount through the use of automation, artificial intelligence (AI) and so-called "intent-based networking."

It is even framing this reduction as a business objective. "We want to use a few people to manage a larger network," said Jeffrey Gao, the president of Huawei's router and carrier Ethernet product line, during an interview with Light Reading at this week's MPLS, SDN and NFV World Congress in Paris. "Our target is to use just one tenth of the current people to manage the network in the next three to five years."

That revelation may send shockwaves through an industry already reeling from the impact of mass layoffs. According to data gathered by Light Reading in late 2017, the world's 20 largest telcos with headquarters in Europe and North America cut a total of 63,000 jobs in 2016. Ten of them laid off another 21,000 employees in the first nine months of 2017. (See Efficiency Drive by Major Telcos Has Claimed 74K Jobs Since 2015.)

Employees in customer services and other non-technical roles have perhaps suffered the biggest impact so far, but that could soon change if Huawei's assumptions prove accurate.

If there were any doubt about those assumptions, and what they really mean, Huawei says it is already helping Swisscom AG (NYSE: SCM) to cut staff numbers at its IP and optical networks business.

Swisscom has about 400 employees managing those networks, but the figure will drop to just 40 if the plans work out, according to Gao.

"We have this vision with Swisscom and are trying to realize that target," he says, adding that a reduction of this magnitude could occur in the next three years.

Swisscom is more circumspect about the plans. Under its "NetCity" agreement with Huawei, signed at this year's Mobile World Congress, Swisscom says it is exploring new concepts in wireline network deployment, including the use of "zero-touch operations" technology in its telecom and data center networks. It is also looking to make greater use of telemetry, artificial intelligence and big data at its networks business. (See Swisscom & Huawei Sign MoU on NetCity Project.)

However, when approached by Light Reading, the operator vehemently denied that cutbacks were a business objective. "A reduction of the Swisscom staff involved in managing IP is not part of the NetCity project with Huawei," said a spokesperson in emailed comments.

Swisscom did not dispute the figure that Huawei provided for the number of employees who manage IP and optical networks.

Informed of Swisscom's denial, Huawei said it had demonstrated the possibility "to make efficiencies on that scale." Realizing the target would be up to Swisscom, said Gao.

Such cuts would equal just less than 2% of Swisscom's headcount at the end of 2017, when it had exactly 20,506 employees on its books, according to financial documents. That number was down from 21,127 at the end of 2016 due to headcount reductions in other areas.

Like other major telcos, the Swiss incumbent has been able to realize efficiency improvements by cutting staff numbers while sales growth remains elusive.

Swisscom has recorded revenues of 11.6-11.7 billion Swiss francs ($12.1-12.2 billion, at today's exchange rate) in each of the last four years. But annual sales per employee have risen from about CHF541,000 ($565,000) in 2015 to nearly CHF571,000 ($596,000) last year.

What's the big intent?
Huawei has also been in discussions with Sweden's Telia Company and Japan's SoftBank Corp. about using automation tools and services to reduce headcount, according to Gao. "They have similar ideas," he says. "SoftBank wants to use some AI functions in the network."

The Chinese vendor threw its muscle behind AI last year when it unveiled plans for an AI-enabled compute platform called Atlas. That technology would be deployed in centralized cloud facilities and data centers to perform enhanced data processing and analytics. (See Huawei Commits Up to $20B for Annual R&D, Fleshes Out AI Pitch.)

On the radio side, Huawei has also developed an AI-based system it calls Wireless Intelligence for automating dynamic beam-pattern setting in 5G access networks.

Gao tells Light Reading that an intent-based networking product is due for commercial release in the current second quarter of this year, and that it will unite various tools already in commercial use.

"There are many different components including planning tools, simulation tools, troubleshooting tools, a controller, an orchestrator -- but we want to put everything together," he says.


Want to know more about the emerging SDN market? Check out our dedicated SDN content channel here on Light Reading.


By far the hottest topic at this year's Paris event, intent-based networks represent an evolution of the software-defined network (SDN) concept, and could support additional automation for network operators by "abstracting" the complexity of underlying network processes. "Intent is about defining what you want to achieve without specifying how you want to do it," said Lukasz Mendyk, an OSS product manager at Comarch, during a presentation in Paris.

Most operators have been unwilling to discuss the impact that automation will have on jobs. Some even deny it will lead to major headcount reductions, arguing it will "free up" staff for activities that cannot be automated.

Perhaps the most notable exception is Norway's Telenor, which now plans to cut one in five jobs between 2018 and the end of 2020 through automation and digitization. (See Downsizing Telenor Pins Margin Hopes on Automation.)

Telenor Group (Nasdaq: TELN) had about 31,000 employees on its books at the end of 2017, down from 37,000 a year earlier, although the sale of its Indian business, which employed about 4,000 members of staff, is largely responsible for the sharp fall.

Using current exchange rates, the operator's per-employee revenues were up from about $457,000 in 2016 to nearly $519,000 last year.

In a recent survey by Light Reading, "reducing headcount" emerged as the number-one reason for automating network operations, with nearly a third of the 262 survey takers picking this option out of the six that were made available. (See Automation Is About Job Cuts – LR Poll.)

— Iain Morris, News Editor, Light Reading

(11)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
jasonmorgan
50%
50%
jasonmorgan,
User Rank: Light Beer
7/4/2018 | 5:22:00 AM
huawei
The organization's underlying liable supplication was gotten with together to $1.2 billion punishments and fines, alongside the expulsion of four senior representatives, alongside more aftermath for bring down level workers. Custom Leather Jackets
Gabriel Brown
50%
50%
Gabriel Brown,
User Rank: Light Sabre
4/17/2018 | 5:17:35 AM
Re: Party of none
What could possibly go wrong if you cut 90% of your network operations staff?

I suppose you could always use a vendor contractor to fill the gaps when stuff does break ;)
DanJones
50%
50%
DanJones,
User Rank: Blogger
4/16/2018 | 9:47:48 PM
Re: U.S. companies banned from selling components to ZTE
https://www.lightreading.com/us-govt-bans-domestic-component-sales-to-zte/d/d-id/742277?
rocket101
100%
0%
rocket101,
User Rank: Light Sabre
4/16/2018 | 1:51:29 PM
U.S. companies banned from selling components to ZTE

Why did not Lighhtreading publish the following story of the Chinese company ZTE yet? Is this NOT newsworthy? Bet what the other Chinese company Lightreading is too fond of  muts be doing?

How can all  Chinese vendors be trusted? ZTE already accepted that they are guilty. Is there any more discussion left? What competition are we talking about? These vendors know only one thing and that is to C****.

 

This time last year, Chinese electronics giant ZTE pled guilty to violating sanctions on Iran and North Korea. This morning, the U.S. Department of Commerce announced a seven-year export restriction for the company, resulting in a ban on U.S. component makers selling to ZTE. 

The company's initial guilty plea was met with up to $1.2 billion penalties and fines, along with the dismissal of four senior employees, along with more fallout for lower level employees. As part of the initial agreement, ZTE was allowed to continue to work with U.S. companies, assuming it adhered to the rules laid out in the agreement. The DOC, however, contends that ZTE failed to significantly penalize those employees.

"ZTE made false statements to the U.S. Government when they were originally caught and put on the Entity List, made false statements during the reprieve it was given, and made false statements again during its probation," Commerce Secretary Wilbur Ross said in a statement provided to TechCrunch. "ZTE misled the Department of Commerce.  Instead of reprimanding ZTE staff and senior management, ZTE rewarded them.  This egregious behavior cannot be ignored."

A senior department official tells Reuters, in no uncertain terms, that the company, "provided information back to us basically admitting that they had made these false statements."

The penalty is steep, given that U.S. companies are believed to provide more than a quarter of the components used in ZTE telecom equipment and mobile devices. The list includes names like San Diego-based Qualcomm, which provides Snapdragon processors for the company's flagship devices.

The news arrives amid fears of a looming trade war between the U.S. and China. ZTE has also been repeatedly name-checked by U.S. intelligence officials over spying concerns, along with fellow Chinese smartphone maker Huawei — though ZTE has managed to make more inroads with U.S. carriers over the years, regularly showing up around fourth place in market share. 

 

mendyk
50%
50%
mendyk,
User Rank: Light Sabre
4/12/2018 | 4:12:30 PM
Department of Clarification
For the record, I am not Lucasz. Not everybody knows that.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
4/12/2018 | 4:07:33 PM
Re: Hazy analyst forecast
Yeah -- these labels go out of style pretty fast. Hazy analyst probably sounds better than foggy analyst.
James_B_Crawshaw
50%
50%
James_B_Crawshaw,
User Rank: Blogger
4/12/2018 | 3:52:55 PM
Hazy analyst forecast
I like the sound of being a hazy analyst. I think it could be the next big thing after cloud and fog computing. Intent based networking was so last week. The future is hazy networking!
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
4/12/2018 | 2:41:32 PM
Re: Party of none
Is there hard evidence of how 90% redundancy is reached in five years or less? Or is this just some smack-talking that comes off with more than a hint of arrogance?
iainmorris
50%
50%
iainmorris,
User Rank: Blogger
4/12/2018 | 2:27:46 PM
Re: Party of none
That is what they are saying is technically possible. Whether it happens is up to the operators, they argue. In Europe I think the main barrier is cultural. Operators just aren’t in a position to cut jobs that fast and would be worried about such extreme automation, and there are labor union issues in some markets. If it can happen it probably will - just over a longer timeframe.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
4/12/2018 | 2:01:20 PM
Re: Party of none
On the one hand, it's hard to ignore a company that has almost single-handedly disrupted the telecom supply sector, whether for good or ill. On the other, saying that nine-tenths of the industry's network operations workforce will be gone in five years is more than a little hyperbolic.
Page 1 / 2   >   >>
Featured Video
Flash Poll
Upcoming Live Events
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 6, 2018, London, United Kingdom
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
March 12-14, 2019, Denver, Colorado
All Upcoming Live Events
Partner Perspectives - content from our sponsors
One Size Doesn't Fit All – Another Look at Automation for 5G
By Stawan Kadepurkar, Business Head & EVP, Hi-Tech, L&T Technology Services
Prepare Now for the 5G Monetization Opportunity
By Yathish Nagavalli, Chief Enterprise Architect, Huawei Software
Huawei Mobile Money: Improving Lives and Accelerating Economic Growth
By Ian Martin Ravenscroft, Vice President of BSS Solutions, Huawei
Dealer Agent Cloud – Empower Your Dealer & Agent to Excel
By Natalie Dorothy Scopelitis, Director of Digital Transformation, Huawei Software
All Partner Perspectives