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.