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Cisco To Cut 1,100 More Jobs Amid a Worse-Than-Expected Business Outlook (cnbc.com) 58

Cisco said this week that it will cut an additional 1,100 employees as part of an expanded restructuring plan. From a report: The cuts come on top of the 5,500 job cuts, or 7 percent of its workforce, announced in August 2016, the enterprise technology company said. Cisco said it plans to recognize hundreds of millions of pretax charges related to the restructuring, which will end around the first quarter of the 2018 fiscal year.
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Cisco To Cut 1,100 More Jobs Amid a Worse-Than-Expected Business Outlook

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  • by zlives ( 2009072 ) on Thursday May 18, 2017 @02:58PM (#54443487)

    to at least once hear about cisco away from the US Cert alert emails. wonder why the outlook looks grim,
    build back doors, get caught... not profit.

  • by bluefoxlucid ( 723572 ) on Thursday May 18, 2017 @02:58PM (#54443495) Homepage Journal

    Amid FortiNet and friends taking Cisco's business, nobody is flaming about jobs being lost in the industry while ignoring the growth in other competing businesses? Nobody's going to claim unemployment increases while unemployment continues to fall, even in the tech sector? Nobody's going to demand Cisco "just cut back profits" as they lose business and somehow keep paying their existing staff even as their customer base shrinks?

    What happened, Slashdot? All I see is Obama and Trump talk (both bullshit).

    • by Junta ( 36770 )

      It's early in the thread, but I'll bite:

      Nobody's going to demand Cisco "just cut back profits" as they lose business"

      Well, if they don't cut back profits, they *will* lose business. That's the problem with the leaders of these businesses, they demand growth, but cut back. Of *course* you can't sustain or grow your business if you are defeatist and ditch your people. A good business will accept lower profitability for the sake of investing in some way that delivers growth next go around.

      Of course, if you are consigned to a reality that you *won't* grow, go ahead and do the layoffs

      • Holy shit, their average quarterly margin for 5 years is 19.28%.

        Generally margins are slim, around 7%-12% (e.g. GM average is 4.53% ranging 0.6%-15.8% quarterly; Ford is 4.19% ranging -5.31%-20.86%; Restaurant Brands International owns Burger King, at 12.68% ranged -8.43%-28.75%). 20% average operating profits is sizable. CISCO can cut their margins and reduce their prices by at best 10% to try to compete; with the increased competition, they may very well need to.

        Still, that won't help, because...

        they demand growth, but cut back. Of *course* you can't sustain or grow your business if you are defeatist and ditch your people. A good business will accept lower profitability for the sake of investing in some way that delivers growth next go around.

        T

  • by Anonymous Coward

    I remember at one particular meeting that John Chambers had at the RTP campus (back when they didn't have layoffs every year). And John said something to the effect of "Whenever we have layoffs, it means that management has made some poor decisions."
    It seems like management has been making the same poor decisions over and over again.. Im so glad I got out when I did.

    -db

  • I remember when I was selling a European made security appliance that one of the sale points was that unlike Cisco, it doesn't have a backdoor. It wasn't a conspiracy either it was just something everybody knew. And this was way before the NSA revealings. Also, american security appliances are strictly forbidden in the central EU institutions, with no exceptions. Personally I think they are the clunkiest hardest to use appliances of all, you need 6 certifications just to install it.
  • by ErichTheRed ( 39327 ) on Thursday May 18, 2017 @03:20PM (#54443713)

    Even with Cisco making their own SDN gear, they have a pretty big problem - companies aren't as willing to spend the Cisco premium anymore, even those that do have big on-site footprints ("on-prem" makes me sound like a douchebag brogramming hipster, so I'll just use "on-site.") That means they're selling less gear and having to discount it more. Couple that with them trying to extract as much revenue as they can with their SmartNet contracts, which you have to buy if you want firmware upgrades, and it's no wonder they're hurting.

    I wonder how the whole SDN thing will shake out. It's interesting because no one would have ever thought of buying dumb white box hardware to do physical connections a few years ago and controlling the whole thing from an abstraction layer. What I wonder is whether they're going to start believing their own hype and just stop investing in the hardware altogether. It's really easy to let the hype train carry you too far over to the extreme edges - like everything, there will always be a middle ground.

    What also makes me wonder is how they can just snap their fingers and lose 1,000 people. First, that's a lot of well-paid people to dump onto the labor market all at once. Second, what were these people doing that made Cisco decide they weren't useful anymore?

    • The other part is that a 'normal' connection can be 100 gigabit, and most of even the more aggressive networking environments don't usually go beyond 10gbit a part, and the industry standard switch chips are readily available to do those at full line rate with large numbers of ports.

      With that, the things that used to be cisco's bread and butter (proprietary switch 'stacking', chassis switches, etc) become less relevant. In fact, in many product areas they allowed themselves to be leapfrogged in many perfor

    • This is why Cisco isn't bothering to innovate on SDN anymore and they're just buying folks up. The Viptella acquisition is a good move for them, since it's packet-centric (as opposed to application-centric) just like most of Cisco's offerings.

      Don't forget that they're also adding headcount with all the acquisitions they're making as well.

  • by mattsday ( 909414 ) on Thursday May 18, 2017 @03:43PM (#54443917)

    I was at Cisco for over 12 years and this kind of announcement isn't really news any more. Employees at Cisco are little more than yearly contractors. John Chambers, the former CEO, used to talk about Cisco being a family. If it is, then it's a highly dysfunctional one now!

    • Well, families are not that different today, marriage is a contract and often it is terminated (by one side or sometimes mutually).

    • by Anonymous Coward

      10 Years with Cisco here; and this will be my last.. I'll be one of these numbers; oh well good riddance...

      Fall short of market predictions on the billions of income? No Bonus for you!
      Slightly exceed market predictions on billions of income? Here's your layoff notice..

      Next job will not be for a public company.. screw this. captcha: dramas

    • Also, he changed the contract's maximum time limit to 18 months/1.5 years. :(

  • by Anonymous Coward

    The bottom line is that Linux is starting to eat Cisco's lunch in one form or another. This is happening to UNIX servers(RedHat), phones(Android), and desktops(Chromebook).

    In the end, you can't compete with Free (both definitions).

  • I really hope that the majority of those lay-offs were of people who came up with their ridiculous product pricing.

    Cisco should change their mission statement to, "You probably can't afford it."

    • Their pricing is a starting point. Generally, no one actually pays those prices. You just call someone and just saying hello gets you 50% off and playing hard to get for a few seconds will get you 70% off and if you claim "I think at that price we can fit it next quarter, but HP said they can meet our financial needs today" and Cisco will come in at 80% off... and they'll still have their 20% margin.

      The high list prices have a lot of purposes... though I'm not an accountant, but it makes sense for insurance
  • The CEO needs a new yacht to keep up with the other CEO's who bought bigger yachts? I've heard that back in 2013.
  • Once cisco moved from being a technology company, to one focused on licensing, it was just a matter of time.

  • I've noticed that Trump is fairly quick to claim victory when he saves a few jobs, but where is he when there are layoffs? Why did he feel Carrier more worthy to use his magic sparkles on than Cisco?

Nothing is easier than to denounce the evildoer; nothing is more difficult than to understand him. - Fyodor Dostoevski

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