Juniper cuts US staff while hiring in India
Published: 03 Feb 2004 12:10 GMT
Juniper Networks is trimming its work force in the United States as it expands its engineering group in India, a company official said on Monday.
The Internet Protocol router maker confirmed that it has laid off roughly 30 people, or 4 percent of its engineering staff in its California and Massachusetts offices. It also verified that it is expanding its Bangalore, India, facility, which currently employs between 25 and 30 people, the official said.
The news comes as many technology companies face criticism for sending engineering jobs overseas, especially to India. Several software companies, such as America Online, Google and Yahoo, have already begun setting up facilities in Bangalore.
Industry research groups predict that companies will continue to relocate software programming and information technology jobs overseas in the coming years. Gartner predicts that one out of every 10 jobs at US IT companies will be transferred abroad by the end of 2004. IDC estimates that by 2007, 23 percent of all IT services jobs will be offshore, up from 5 percent in 2003. The figures refer to IT work done for US-based companies.
Tech companies argue that transferring some functions offshore can save money and preserve US jobs, but critics say the practice hurts an already ailing US work force, which has suffered through a brutal economic downturn.
A Juniper official emphasised that the company is not moving all of its software testing and development to India and will continue much of this work in its three North American facilities. The company also denied that it is replacing expensive US workers with cheaper labour from India, stating that the company is adding engineering workers in all of its locations.
"We are continuing to invest in and expand research and development in the US," said a Juniper official. "And as in this case, projects will continue to shift, since we are a global company."
Earlier this month, Juniper, which competes against networking giant Cisco Systems, blew past analyst expectations when it reported earnings for the fourth quarter of 2003 of $15m (£8.25m) in profit on $207m in revenue. But with much of the company's growth coming from international sales, Juniper officials said it makes sense that it is investing more in research, development and support overseas. For the past few quarters, more than 50 percent of Juniper's sales have come from outside North America, with more than 30 percent of sales in Asia, according to the company.
"Our expansion in India will give our APAC customers a higher level of local support," said the official.
Juniper has had a sales office in India since 2000, and it recently opened the software testing and development office in Bangalore in September of 2003 to help support its growing number of Indian customers. The company currently counts as customers Baharat Sanchar Nigam, India's largest telecom operator, and Data Access, India's largest private sector international data carrier.
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