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Cisco Systems Inc. to dump 16% of its workers!

Cisco Systems announced plans today to lay off 9% of its workers and to transfer another 7% of its workers to another company in a sale of one of its businesses. Cisco will give “pink slips” to 6,500 workers, including 2,100 employees who volunteered for early retirement packages. According to CNNMoney, Cisco is engaged in a previously announced plan to streamline it’s “…business in an attempt to clarify the company’s role in the tech world.”

Identity crisis?

At least the article does not use the tired and meaningless business phrase, “… returning to our core competencies…” which Dilbert‘s “Asok the Intern,” in “business language explained” once translated as “… we can’t find our ass with both hands.” I once wrote a blog paying tribute to the creator of the Dilbert strip, Scott Adams, who lives in the next town to the west of me and who used to work at Pacific Bell (->SBC [once my customer] ->AT&T).

I used to ride my motorcycle from Livermore to Milpitas, through “Cisco Land” on E. Tasman Drive, to work at the Sun Microsystems Santa Clara (Agnews ) campus.

In April, Cisco closed its Flip video camera business and simplified its corporate organizational chart (CNNMoney’s article is entitled “Everybody hates Cisco”). (Matrix management? :-) I have always said that if you report to more than one person, then your company does not know what it is doing. One of my friends reports to SEVEN people [The seven deadly sins? The seven dwarfs? :-) )! Also in April, in a memo to employees, CEO John Chambers wrote that the company would take “bold steps” and make “tough decisions.”

Tougher for YOU than for ME! 😉

But maybe Cisco is smarter than most companies (certainly smarter than the “old Sun Microsystems”), in that, of the 6,500 employees being laid off, Cisco will cut 15% from the vice president level and above! :-) You know, the “golden parachute” folks with the hefty early retirement packages! Cisco expects that it will incur up to $1.3 billion in severance expenses, most of it in the current quarter ending July 31. The rest will be incurred in the next fiscal year.

In addition, Cisco will sell its set-top box manufacturing facility to Foxconn, the Chinese company best known for manufacturing Apple’s iPhone and iPad. Around 5,000 of the Cisco Juarez employees will be transferred to Foxconn over the next several months.

Do I expect suicides in Juarez? Heck no! Maybe murders…. :-)

Cisco employed about 73,400 staff at the end of April. With the exclusion of new hires :-) that number should drop to around 62,000.

-Bill at

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