Cisco Finds Focus Loses and 6,500 Employees

The tech sector has felt somewhat sturdy in regards to job security in this fragile economy. Data from the Bureau of Labor Statistics that shows employment in computer systems design and related industries has grown by 42,000 and Apple and Google have already posted record breaking profits this year. Not so for Cisco though.

The networking giant has failed to grow, locked at a standstill for over a year which is causing them to lose money. Their stock is down more than 21% year-to-date and now CEO John Chambers is following up in his promises to make “tough decisions” and take “bold steps.”

Cisco is letting go of approximately 15 % of its staff worldwide. They currently employ a staff of 73,400 but will be cutting 6,500 reducing the team to 62,000. The cuts include 2,100 who volunteered for early retirement packages. Employees will be informed if they’ve made the cut starting the first week of August.

5,000 additional employees will be transferring to Foxconn (China) by October as part of the sale of their Juarez, Mexico-based set-top box manufacturing plant. The Chinese company manufactures iPhones, iPads and other Apple products. The decision to sell is part of the attempt to streamline Cisco’s purpose in the tech world.

Earlier this year 550 employees lost their jobs in a large scale management restructure and the scrapping of previously approved projects. Surmounting competition from companies like Juniper Networks Inc. and Hewlett-Packard Co. lead Cisco to analyze what wasn’t working. Expanding in too many markets blurred Cisco’s focus. Efforts to clarify the company’s vision resulted in high level layoffs and the closing of the company’s Flip video camcorder business.

The long term goal is for Cisco to reduce their annual operating expenses by $1 billion, or about 6%. The initial severance payoffs will be well over that amount but Cisco is certain the long term savings will bolster the company’s numbers.


By Heather Fairchild - Heather is a multimedia developer with experience in web, film, photography and animation as well as traditional fine arts like painting and sculpting. In addition to writing for TechCareersBlog.com, she is co-founder of design and promotion company. Heather’s spare time consists of making puppets, teaching Sunday School, building Legos and doing science experiments with her children.