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

The Chinese vendor says its automation tools and services will support major workforce reductions in network operations.

Iain Morris, International Editor

April 12, 2018

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

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

Read more about:


About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like