Cisco shares fall after report of 4-day shutdown

[Newsjock]

Source: Reuters

Shares of Cisco Systems Inc fell almost 4 percent on Tuesday after UBS said in a research note that the company was planning a four-day shutdown to cut costs for the first time in its history.

Cisco did not immediately comment on the report.

UBS analyst Nikos Theodosopoulos said in a research note that it thought Cisco was likely aiming for more than the planned $1 billion in cost cuts it had outlined in its recent earnings conference call.


Read more: http://www.reuters.com/article/ousiv/idUSTRE4AO6YV20081125

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More from Gigaom:
http://gigaom.com/2008/11/25/cisco-to-shut-down-for-4-days-at-year-end

If you want to know how bad it is going to get for all of us in Silicon Valley, just look at Cisco Systems. For first time in its history the company is going to shut down for four days at the end of the year, according to a report by UBS Research. Remember when such shutdowns were associated with industrial era companies? Well, this is the new past as they say. I heard that a major internal annual event has been put on hold as well.

[DS1]

1. Eh. It takes the average consumer that long to navigate their website

[heliarc]

2. LOL

true true

[melm00se]

4. they are not a

company (or provide products) for the "average consumer".

Their web site is as obtuse as any upper echelon, B2B high tech company.

yes, they have the linksys products but those are available at www.linksys.com

[DS1]

5. I realize that

but even as a network admin at a net-based company, I found it to be almost purposely unhelpful. Not surprising considering that you have to pay for a support agreement to just talk to a sales engineer.

[Pavulon]

12. clis are satable, gui

is garbage. Once you get to a certain level of technical expertise the cli is required. Enterprise storage, routing and switching, will not be point and click in the near future.

They sell carrier class systems and are not going out of business. They can loose share to other companies.

[DavidMS]

13. Have to agree with you

I am also in IT and found that just figuring out if there was a new version of their VPN client was an adventure. If you want real fun... try configuring it to run a script after the VPN connection is established. You can't unless you script it yourself. Their equipment is good but more expensive than it should be from what I have seen.

[Pavulon]

15. Juniper

is FAR superior product to cisco firewall.

[apnu]

19. "Their equipment is good..."

That depends on what tier within the Cisco product line you're talking about. The lower tier, SMB, items are total junk. Considering the going rate for a ASA 5510 firewall is about $5000.00 and it has a CELERON processor it is highway robbery.

You're right about the expense though. If one wants to get into the areas where Cisco isn't putting garbage processor and memory chips in their equipment and you want a reasonable level of performance and stability, then the price grows exponentially the higher one goes up the product chain.

Its for this reason I've been playing with Vyatta routers and other things. I'm trying to convince my company to take a chance on the startup.

(edited to fix a bbcode problem)

[Pavulon]

24. Nexus, MDS, as well as 6, 7, and crs1 class

routers and switches are great. I have worked with juniper and they make a great product. The asa is shit. Over priced over complex.

Cisco has problems in markets they buy into. smartnet is way to expensive and the level of support has dropped.

They do some things very well and have smart people. Nexus converged model is interesting.

[pauliedangerously]

6. Yeah, no kidding...

That's why they stopped making the 67x routers for DSL. Average consumers have enough trouble with a Windows GUI, but to have to type in commands? The dickens you say.

[CatholicEdHead]

10. The IOS can be powerful and that is a bar to use it

Similar to Linux/Unix and the command line. Of course the IOS is often unintuitive (working on my CCNA now).

I don't see them going down the tube as they have powerful hardware but will decline as the rest of the business world declines. Cisco is a major factor between each poster and the DU servers online anyways.

[high density]

7. I am beyond the average consumer and it is a massive pain to find what you're looking for

Of all of the technology companies I deal with, Cisco has the most screwed up website there is. I agree with DS1 that it feels like they have gone out of their way to make it impossible to find the information I'm looking for. If/when our Cisco router dies at work, I sure as heck will not be replacing it with another Cisco. The hardware itself is rock solid, but everything else from them is quite lacking.

[apnu]

20. I don't deal with Cisco directly unless I have to open a TAC case.

Where my knowledge is lacking, in Cisco, I hire someone to help me. When I need to purchase, I go through a vendor and pay a little bit more so I don't have to go through the hassle.

Cisco's web presence is about as good as their documentation, that is to say, not good at all.

[MilesColtrane]

3. "I heard that a major internal annual event has been put on hold as well."

Come-dressed-as-a-character-from-Dilbert Day?

oh noes

[musette_sf]

8. i was in line at Trader Joe's the other day

talking with my H about how i'd heard that Cisco seemed to be having financial problems (the $1B cost cuts previously announced). snotty young 'un (i.e., under 30) in front of me butts in to tell me that everything at Cisco is A-OK. followed by a lot of BS fed to him by his management about how GREAT everything is going for them and what a GREAT company they are. he announced that he was part of sales force technical support, and before i could say "gee, if i were you, i'd be cruising Dice looking for something else", went into a bunch of "we're optimizing efficiencies" and more BS blah blah buzzwords.

HA HA, suck on THAT, Cisco-boy!

the young, the gullible, the True Believers In Venal Capitalism...

Cisco was great once, but those days are done.

[Pavulon]

11. Please

cisco is a massive global provider of routing and switching equipment to business, governments, and ISPs. They are not going belly up.

Just because some prick in a line somewhere runs his mouth does not summarize an entire company.

They make THE BEST product in many spaces they sell in. That is just good business.

[musette_sf]

14. i didn't say they were going belly up

and i've been aware of Cisco since 1992 or so when they were one of our vendors at the computer reseller that i worked for at the time. (wish i'd bought stock then and dumped it at the right time)

but Cisco isn't what it was back in the glory days, and there are a lot of people playing in that space that weren't there 15 years ago.

i live in the area. i know people who work and have worked at Cisco. i'm not an idiot about the company, as your knee-jerk post seems to suggest.

THEY ARE NOT DOING WELL THIS YEAR. a lot of companies are not doing well this year. and if i were an employee overhearing local gossip on the problems their company is having, i sure wouldn't butt in and spout the party line to all and sundry.

personally i am hoping that Cisco will have to pull support of the "Fremont A's Ballpark Village" project. hopefully a few lackluster quarters will help out with that.

[Pavulon]

16. not meant to be knee or other type of jerk

just saying they are a pretty stable company that makes some good products. Some they make are terrible.

However they are a long term stable company. They have good products in route switch, and voice. Lots of smart people there.

regards.

[apnu]

21. I've had simular expirences with Cisco employees...

... management there must make some pretty fine Kool-aid.

[Tiberius]

9. My company is doing this as well

...but only to folks in a particular division. They must each take a two-week unpaid vacation, and cannot use their vacation time.

Thankfully since I'm in IT I was not required to do this. But I fear this will be a major trend in the near future.

[okieinpain]

17. man that would kill me. n/t.

[phusion]

25. I know it would hurt some people

but, frankly, I would welcome two weeks off...paid or unpaid!

[melm00se]

18. my final comment

I see comments that Cisco is in trouble....let me ask you a question: which would you rather see? a 4 day shut down or a series of layoffs?

[apnu]

22. In all reality, both will come from Cisco in time.

Its just the sign of the economic times in America. Furthermore, Cisco is a giant monolith, just like Microsoft. And as such, their size and presence and dominance of the market all comes at the cost of nimble maneuvering and reaction time to the speed of the market. Since the IT universe is showing all signs of accelerating (much like our real universe) Those that can't rapidly change and adapt will always be at a disadvantage. Which leads Cisco (and Microsoft and any other giant) to attempt to leverage their size against an unwilling market, leading to further problems, further acceleration, further loss of responsiveness to a changing landscape.

Which all leads me to believe that in time Cisco will grow so large that it cannot sustain its own weight and will have to make deep cuts in order to get some of that adaptability back. Combined with the nasty recession we are in, and cuts are inevitable as mondern-day management has no idea how to be cost effective in the corporate world other than cut staff. That's not specifically, Cisco's fault, but it is a fault of the set of all middle management, of which Cisco is a member of.

[Ignis]

23. Well, crap.

I work for a Cisco supplier, and this isn't great news for us.

Things are going to get ugly here in the SiliValley. :(