Report: Cisco to cut as many as 10,000 employees

The struggling network switching and router company Cisco could cut as many as 10,000 of its employees in order to save as much as $1 billion. Bloomberg reports via unnamed sources that 7,000 employees will be flat out cut by the end of August. Another 3,000 team members will be given early retirement deals. The amount of employees that are to be cut represent about 14 percent of Cisco's total work force.

Cisco has already been trying to cut team members and divisions. Earlier this year it shut down its Flip portable video division and eliminated 550 jobs as a result. Cisco bought the Flip business just two years ago for $590 million. Cisco is also facing more competition from other companies such as HP and Juniper Networks for its network switching and router businesses, respectively. The story states that Cisco could get out of selling consumer electronics products altogether. That might include the Linksys wireless router division. The company is also supposed to reorganize its management structure.

Cisco is expected to save as much as $1 billion in its current 2012 fiscal year as a result of the job cuts and retirement deals. Employees who get the early retirement packages will receive one year's pay along with medical benefits, according to the report. Cisco is expected to revealed its latest financial results in early August. The company's total revenue is expected to be $43 billion in 2011. That's up seven percent compared to 2010 but down from an 11 percent rise in revenue from the previous year.

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17 Comments

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KingCrimson said,
Another non-Apple company going down the tubes....

what does apple have to do with this in any way? Apple doesn't make high end routers and network equipment

Stewart Gilligan Griffin said,

what does apple have to do with this in any way? Apple doesn't make high end routers and network equipment

Because Apple is making all kinds of products that catch the public eye with big shiny icons, and easy to navigate menus while lacking commercial grade security features. Cisco is ahead of thier time, and many people don't understand their technology, so instead they buy an HP switch/router with a nice GUI and huge clickable icons.....

It appears now that other technology companies are catching up to Cisco and provide cheaper products and may provide the same functionality

Is this directly related to the major ISPs refusing to upgrade their infrastructures...instead preferring to slow down the pace of US Internet adoption and innovation through adding bandwidth caps?

Or is someone else doing the back-end tier sales instead of Cisco now?

FMH said,
10,000 is a maddening number.
I hope for the sake of their employees, this report is false.

Maddening is quite right.

Holy cow!!

Buying Linksys made them a household name. Before that, most people didn't even know they existed (at least outside the tech bunch)
I have no experience with HP switches, but I can say that the netgear/3com equipment that i've replaced with Cisco was by far an improvement in both speed and configuration.

ndoggfromhell said,
Buying Linksys made them a household name. Before that, most people didn't even know they existed (at least outside the tech bunch)

And? Being a household name != financial success.

Their products are expensive, but they are top notch gear. I'm surprised in a way that they are strugguling, but in the financial climate we live in at the moment, no one is safe really. Shame, yet more jobs going in the IT/Telecomms sector.

Also it doesn't help that HP, Netgear, 3Com, etc are getting much better quality gear out to the corporate clients and home users.

The problem is they are expensive compared to the likes of HP, not only are they expensive, it is also more complicated to work with compared to others.

I would have to disagree. We have their ACE at work and its constantly been the source of problems. From flow issues to XML interface running out of memory to not being fully compatible with their CSS. To top it off you don't pay for the device but buy licenses for it.