Cisco to Cut 6,500 Workers, Record $1.3 Billion in Costs

[marmar]

(Bloomberg) Cisco Systems Inc. (CSCO), the largest networking-equipment maker, plans to eliminate about 6,500 jobs, or 9 percent of its full-time workforce, to help trim $1 billion in annual costs and step up profit growth.

The cuts include 2,100 employees who took a voluntary early-retirement program, Cisco said today in a statement. As part of the move, the company expects to book pretax expenses of $1.3 billion over several quarters, with $750 million in the fiscal fourth quarter. Cisco also said it will sell a manufacturing plant in Mexico, transferring 5,000 workers.

Cisco Chief Executive Officer John Chambers has been eliminating jobs and abandoning less-profitable businesses amid slowing sales gains. Cisco has lost market share in its main switching and routing units to Juniper Networks Inc. and Hewlett-Packard Co., and its forays into consumer products, such as the Flip video camera, faltered.

Cisco, based in San Jose, California, said it will sell the set-top box factory in Juarez, Mexico, to Foxconn Technology Group. No job losses are expected from the sale, Cisco said. ...............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-07-18/cisco-plans-to-cut-about-6-500-jobs-take-pretax-charge-up-to-1-3-billion.html

[Rex]

1. Is Foxconn the Chinese company that has safety nets outside

their buildings to discourage worker suicide?

[AlabamaLibrul]

6. Yes

[Zenlitened]

2. Quick, give 'em a tax cut!

Then they'll hire everyone right back!

[Dappleganger]

3. Oh please, Cisco bought the Flip because they wanted the technology then shut it down.

[xchrom]

4. Recommend

[Major Hogwash]

5. Not enough sales, huh?

Phuckers!!

[econoclast]

7. Cisco is a bad example

There is plenty of demand is Cisco's product spaces .... But that demand is increasingly going to Cisco's competitors. Cisco used to dominate the networking market, but they frittered away their lead. They spent bazillions of dollars trying to break into the consumer electronics market. Bought Flip video at the top of the market only to see video equipped smartphones make Flip obsolete. So there is lots of demand for consumer video devices ... But Flip ain't it. Similar story with set-top Dvr boxes. Another Cisco foray into consumerland. Netflix is eating their lunch ... and diner.

With their attention diverted even Cisco's networking marketshare has been slipping ... Other competitors taking marketshare in some niche product markets. Cisco's story has little to do with flagging demand or high taxes but rather poor management decisions. Time for them to get back to their core business and keep their focus there.