Cisco to lay off 6500 Employees
Cisco Systems has been trying to hone its focus for months now with a large-scale corporate reorganization. And judging by the latest news out of the network equipment giant, Cisco is not out of the woods quite yet.
On Monday, Cisco announced plans to lay off a total of 6500 employees worldwide, or about nine percent of its full-time staff. About a third of those people know that their days are numbered: 2100 of the reductions are employees who “elected to participate in a voluntary early retirement program,” Cisco wrote in a filing with the Securities and Exchange Commission detailing the plans. But the next couple weeks should be fairly tense for the remainder of Cisco’s employees, since the rest of the impacted staff aren’t scheduled to receive their walking papers until the first week of August.
As is often the case with big layoffs, Cisco will have to spend money upfront to make more money later. The layoffs are expected to cost the company $1.3 billion in severance and other termination-related charges.
The cuts are just the latest in a series of recent moves Cisco has made to get back in its investors’ good graces. In April, CEO John Chambers admitted publicly that Cisco’s recent forays into consumer products, video and social software had led the company to lose focus, and vowed to make the necessary moves to regain an edge in its core networking business. Soon after, the company posted lackluster financial results that brought on a proper hammering in the stock market.
In May, Cisco outlined plans to embark on an official corporate restructuring program, and thus far the company has been unsparing in its cuts, which have included the closure of its Flip video gadget subsidiary as well as the shuttering of its Eos social publishing platform.
The silver lining for the impacted Cisco employees is that much of the tech industry is on ahiring spree, especially for engineering roles. But at the moment, whether the latest cuts will be enough to get Cisco back on its A-game is anyone’s guess.