Cisco Simplifies; Cuts 6,500 Jobs

Cisco Systems Inc. (Nasdaq: CSCO) CEO John Chambers promised a simpler Cisco, and on Monday, he took steps to deliver. The company announced it is cutting 6,500 employees -- 2,100 of them via a voluntary retirement program.

Cisco says 15 percent of those cut were at VP and higher levels. The whole culling represents a 9 percent reduction in force -- a number that will mean more to the investors who have watched their Cisco shares stagnate over the past decade than to those who are emptying their desks into boxes this evening.

Cisco says about $750 million of the charges against earnings incurred by the layoffs will be recognized during its fourth quarter, which ends in July.

Why it matters
Cisco's efforts to relieve its bloating (and investor nausea) have been fairly well documented. This is a big step in the process of cleaning up a confusing enterprise and making it easier to understand and less tied to the whims of the consumer marketplace.

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— Phil Harvey, Editor-in-Chief, Light Reading

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RMALVIYA560 12/5/2012 | 4:58:43 PM
re: Cisco Simplifies; Cuts 6,500 Jobs

VP is big in Cisco, I really doubt that number is 1 per 70 employees. In events where Senior Director and above people are allowed, the number&nbsp;is a few hundred. Is it possible that in the latest round of downsizing, 15% of VP and above profiles have been removed? Lets say total number of such profiles was 300 before the exercise, then 45-50 of this rank moved out.

Pete Baldwin 12/5/2012 | 4:58:41 PM
re: Cisco Simplifies; Cuts 6,500 Jobs

OK, I see.&nbsp; I took 15% of the wrong number.

One source is telling us there are 420 VP+'s in Cisco; 15 percent of *those* will be cut, amounting to a little more than 60.

Abby 12/5/2012 | 4:58:29 PM
re: Cisco Simplifies; Cuts 6,500 Jobs


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