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Cisco Systems (CSCO), announced that it “may” cut as many as 10,000 jobs, or about 14 percent of its workforce. The cuts could take place as soon as next week. The struggling company is offering employees very generous early retirement and benefit packages to leave soon. The cuts are expected to save Cisco $1 billion in savings next year.
However many say it is just too little too late. Others say the layoffs should be 20,000 or more to be of any material benefit to Cisco. 10,000 is just too small to have any real impact.
“They simply have too many employees.” said Brian Marshall, an analyst at Gleacher & Co.
That is a something we have heard numerous times from employees at the company. Apparently, there are many people just floating around shuffling paper and creating bogus work to exist and milk the company.
A source said that there is simply no accountability at an level. Mediocrity is rampant and innovation is dead.
“Cisco has no core values anymore, no core teams, or core strategy. The company is fragmented in so many ways and the results are too many old boys in the old boy network, hiring other old boys and running the entire company into the ground. In a way, it resembles some old school company from another time, once innovative and respected, but now a calcified relic.” according to an insider.
Yet others say that Cisco’s real problem is CEO John “Mubarak Hussein” Chambers who spent over $35 billion acquiring hundreds of companies that have gone no where. There were no synergies or coherence behind the acquisitions. It netted Cisco a sea of employees that it never needed and made it uncompetitive at every level. They say that as long as Mubarak Hussein Chambers remains the cancer has not been removed.
Cisco’s share of worldwide switching revenue dropped 5.8 percentage points to 68.5 percent in the first quarter of 2011 from a year earlier, according to a May report from Dell’Oro Group, a Redwood City, California-based researcher. It’s competitor Hewlett- Packard gained switching share in that period.
In global router sales, Cisco lost 6.4 percentage points to 54.2 percent of the market, while another competitor Juniper Networks gained, said Dell’Oro and it’s revenue is projected to rise just 7 percent this year, less than the 11 percent growth posted in 2010, according to the average estimate of analysts in a Bloomberg survey.
Cisco’s stock has dropped over 90% in the last 10 years and it lost 32% percent last year while the market soared. The stock had dropped 24 percent this year before today, while the Standard & Poor’s 500 Index had risen 4.9 percent.
Channels: cisco, HP, juniper, layoffs
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Comment by SS Hem — July 12, 2011 @ 11:25 AM
With Cisco, 10,000 "employees" typically means 9500 contractors and 500 FTE's.
Comment by Jeff Jacobs — July 12, 2011 @ 11:26 AM
Jeff, Definitely I am against anybody that lost their jobs. My question is what made you to arrive that 9500 contractors and 500 FTE's.
Comment by Kiran — July 12, 2011 @ 4:09 PM
It's amazing – Cisco has total assets of $81billion of which $51billion is in current assets. See: http://finance.yahoo.com/q/bs?s=csco+Balance+Shee...
It just is unable to use its huge asset base to expand its business.
Comment by vkmo — July 12, 2011 @ 8:40 PM
Just wait until the actual layoffs happen. They will be followed by appalling lawsuits.
Cisco has been aggressively hiring foreign workers (H1-Bs, mostly), and will be
laying off American workers more-or-less exclusively. Cisco is in danger of
turning into the Immigration Fraud Poster Child.
Comment by Dave Chapman — July 13, 2011 @ 8:59 AM
Why would the WebGulid group even post the comments of "CEO John “Mubarak Hussein” Chambers"
It's a huge insult to John Chambers. Come on , They say that as long as Mubarak Hussein Chambers remains the cancer has not been removed.
Yes, Cisco has made mistakes, but let's hold off on the name calling of the CEO.
Comment by Don — July 13, 2011 @ 1:21 PM
I second Don 's comment . It is a common Human Physiology problem , When Cisco was on Rise everybody was Praising Chambers and now they forgot all the efforts and work done by Chambers to make Cisco what is Cisco Today.
I am hopeful Cisco will come Victorious from this Turbulent Period very soon ,
Good Luck Cisco and Chambers
Comment by Thomas — July 15, 2011 @ 11:22 AM
Normally if an aquisition happens, layoff follows immidiatly. Cisco was generous in keeping the employees of the aquired companies. I would say regular checks and balances were not made for years that led to this tragedy.
Note: To cut more cost and show profitability, more outsourcing will happen. H1bs have to go home!!! but wait…. they can take home the jobs too…Scary…
Comment by Solaris — July 18, 2011 @ 10:28 PM
You dillholes. This is an offshoring move and will greatly cut costs. Those offshore cost the co pennies compared to what's left of the US workforce.
Comment by juandotcom — July 19, 2011 @ 8:20 AM
Unfortunately those that will get caught in the layoffs will not solve the problems. The problem is typical in many companies, you have the old "empire building" mentality. This results in replication of efforts and no communication outside select groups. The company froze most salaries years ago and continues to cuts benefits, bonuses and little perks (like free soda) to the average worker (individual contributors ) This combined with managements expectation that everyone should work an 60+ hour week and be happy about it. Mean while senior management continues to pat one another on the back and collect their fat paychecks and get millions in stock. No wonder innovation is stifled.
Yup laying off those 10,000 workers is really going to all fix that….
Comment by boson — July 20, 2011 @ 3:39 AM