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Students visiting the Cisco headquarters in Netanya, Israel / Courtesy

The San Jose, CA headquartered networking giant Cisco is about to announce the layoffs of as many as 14,000 employees, or about 20% of its global workforce, according to sources close to the company. Early retirement package plans have already been offered to many employees, as Cisco is preparing to publicize its fiscal quarter results Thursday evening. According to Calcalist, the layoffs will include between 200 and 300 Israeli employees.

Cisco Israel, headquartered in Netanya, employs more than 1,500 workers. Last October it let go of 40 employees and over the past three years of about one thousand. At the same time, according to Calcalist, Cisco has also been recruiting new employees in Israel, as well as making acquisitions: Cloudlock for $293 million in June, and Leaba for $320 million in March. Cisco has also signed a cooperation deal with Israel’s largest financial institution, Bank Hapoalim, and announced a new initiative with the Israeli government, turning the Negev into the “world’s first digital region.”

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According to CRN, the heavy cuts are the inevitable result of Cisco’s transition from its hardware roots into a software-centric organization. CRN cites a source familiar with Cisco’s transformation that said “they need different skill sets for the software-defined future than they used to have. In theory the addressable market could be higher and the margins richer, but it will take some time to make this transition.”

The notion that a good portion of that future growth will involve Israel’s quality software workforce bodes well for the local hi-tech industry.

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