Cisco will reportedly lay off more than half of the staff it acquired through its 2013 acquisition of small cell maker Ubiquisys, and the future of its Intucell acquisition is looking uncertain too, Light Reading has learned.
Two sources have informed Light Reading of Cisco Systems Inc. (Nasdaq: CSCO)'s plans, while an article last week in the UK's Channel Register corroborates the rumors, noting that Ubiquisys wasn't able to move from "start-up mode to operational mode" within the huge vendor.
A Cisco spokesperson said the company doesn't comment on rumors or speculation, but offered the following statement: "Cisco remains committed to driving innovations across our entire service provider mobility portfolio -- including small cell technologies -- as we advance our strategy to enable service providers to efficiently deliver new revenue-generating services and experiences for their customers."
Even so, our sources suggest there have already been many exits from the Ubiquisys offices in the UK, which originally included about 150 employees. And, Cisco could be planning to let go of half or more of those who remain. Those who have already left include former Ubiquisys CEO Chris Gilbert, Pete Keevill, Will Franks and Keith Day. The latter two both joined startup Telensa.
Cisco spent $310 million on Ubiquisys and $475 million on Intucell, which it is rumored to be considering winnowing as well. If these rumors are true, that would equate to a nearly $1 billion write-off in two years, not to mention an essential exit from serving the enterprise small cell market on its own. (See Cisco Buying Ubiquisys for $310M and Cisco to Buy AT&T's Favorite SON Startup.)
Adding fuel to the fire, Cisco announced at Mobile World Congress that it would begin reselling SpiderCloud Wireless 's enterprise small cells in some cases -- however, that it was looking increasingly likely in most cases. Most of its customer wins since then have been those brought in by SpiderCloud, according to another source familiar with the business. (See SpiderCloud Spins Web of Small Cell Partners and Cisco to Resell SpiderCloud's Small Cells.)
The Cisco spokesman, however, adds that Cisco is responding to customer RFPs with its full set of small cells: residential, small enterprise and large enterprise, and only the last one incorporates SpiderCloud's technology.
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These past and upcoming layoffs could be a result of management changes that Cisco is allegedly preparing to make. Cisco is working to combine some of its business units to create an overall Radio Access Network (RAN) division that would include small cells and its Intucell acquisition, the second source tells us. This process could include more management-level changes and executive shuffling, but this source does not believe Cisco has any intention of taking a step back from the centralized self-optimizing network (SON) technology it was working on via Intucell. (See Cisco's Quantum SON Shines on Small Cells.)
These wouldn't be the first changes to impact Cisco's small cell division. Partho Mishra, former VP and GM of the Service Provider Access Group in charge of small cells at Cisco, left the company in April of last year to take on the CEO job at RASA Networks. Ed Chang, Cisco's VP of product marketing and product management, then left in September, and small cell PR lead Kevin Petschow left in November. Scott Morrison, VP and GM of Cisco's small cell technology group, is currently in charge of both the vendor's small cell and SON businesses, based in the UK. (See Small Cell Movers & Shakers: Update and Cisco's Small Cell Boss Is Gone.)
There are also, of course, changes coming to Cisco at its highest levels of management. Longtime chairman and CEO John Chambers is due to retire this month with Chuck Robbins taking over the top slot. There are a number of upper-level management shifts coming with the changing of the guard as well. (See Cisco's Robbins to Replace Chambers as CEO, New Cisco Leadership Favors Diversity, 2 Cisco Presidents Quit, Cisco: Chambers to Be 'Wingman' to Robbins and Chambers's Legacy: A Resurgent Cisco .)
— Sarah Thomas, , Editorial Operations Director, Light Reading