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3,000 workers are taking early retirement

Cisco is facing tough times as it tries to slash its budget to free up some money. Anytime a major tech firm starts talking about saving huge sums of money, you know that layoffs aren’t far behind. Cisco started talking about smaller scale layoffs a while back and it is now talking about large-scale layoffs with some starting as soon as the end of August.

Sources familiar with the cost cutting measures are saying that 10,000 jobs will be eliminated and 7,000 of those will be cut by the end of August. The additional 3,000 jobs are being eliminated with early retirement packages. The 10,000 employees that are being let go make up 14% of the global Cisco workforce.

Cisco cut 550 jobs when it killed the Flip line of video cameras. The additional workers that will be cut are part of the plan Cisco outlined in May to save $1 billion. The company has already stated that the costs for the early retirement program will add anywhere from $500 million to $1 billion in Q4. The early retirement package includes a year's salary and medical benefits.

Cisco spokeswoman Karen Tillman said, "We will provide additional detail on the cost reductions, including layoffs, on our next earnings call."

Analyst Brian Marshall from Gleacher & Co said, "The revenue trajectory hasn’t been where it should be. The company is not staffed on an appropriate level. They simply have too many employees."

Cisco is still seeing the erosion of its market share in the important networking realm where it generates most of its profits. Cisco has lost 6.4% of its global market share taking it to 54.2% of the market. While Cisco is shrinking, its main competitor, Juniper, is growing. 

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By Smilin on 7/12/2011 2:03:36 PM , Rating: 2
Any idea if any of those are in their VoIP space (cups ccm etc)?

In that market, MSFT has been handing Cisco it's butt on a platter with OCS and Lync.

By kleinma on 7/12/2011 2:08:06 PM , Rating: 2
Not to mention their skype purchase was just approved, which furthers their VOIP arsenal.

By Smilin on 7/12/2011 2:12:55 PM , Rating: 3
Yeah that doesn't hurt but the Skype purchase is more useful on the Google/Apple/Consumer front. The Skype technology obtained isn't as advanced as what they already have.

Even with the butt-kicking I would hope Cisco doesn't downsize in that market. It's got a future.

By Taft12 on 7/12/2011 2:58:28 PM , Rating: 2
In that market, MSFT has been handing Cisco it's butt on a platter with OCS and Lync.

Is this true? I've never really seen any marketshare data that indicates MS voice tech is gaining much traction anywhere in businesses of any size...

If this is wrong, please point me to some numbers

By Smilin on 7/12/2011 5:26:13 PM , Rating: 2
Forgive the randomness of the links I did a quick and dirty search. Lync is a market disruptor. Keep in mind that Microsoft did not add true VoIP to the LCS line of products until 2007. So starting at 0% market share in 2007....

The previous version of the product (ocs 2007 r2) overtook Cisco in 2010.

Lync itself has grown the UC business 30% in the first quarter alone...

Wait until the small/mediums learn you can do an enterprise deployment on the cheap with Office365. :P

By Lord 666 on 7/12/2011 9:55:29 PM , Rating: 2
I have yet to meet anyone on in NYC to use any of those products. Shoretel, yes but not MS VoIP.

By Smilin on 7/19/2011 1:15:41 PM , Rating: 2
Enterprise Voice has about a 50% market penetration. (That's businesses using it, not userbase).

It's certainly possible you haven't seen it in use (yet :P ).

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