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horse of a different color
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horse of a different color,
User Rank: Light Beer
12/5/2012 | 5:05:27 PM
re: Cisco Preps for Layoffs


Agree...kudos to JC for doing it that way. I was at Cisco at the last big swing, when they laid off about 8500 people (working on a next-gen ATM switch was not where you wanted to be...).&nbsp; And they did the same thing then...one big swing, as opposed to most other companies, where they just picked away a little at a time.&nbsp; That does wonders for moral!&nbsp; The problem when I got&nbsp;the ax&nbsp;was that they stated that you had 90 days to find another job within C...which was never really the case.&nbsp; As I understand it, there ended up just being a few postions in engineering that were available...that was it.&nbsp;


I figured that this was inevitable when they announced the end of Flip...I also knew it was a far deeper issue company-wide.&nbsp; It will be interesting to watch what they do over the next 6 months to address both competitive pressures as well as the product refocusing they need.&nbsp; I was always impressed with how effeciently they operated...perhaps they just tried to be be too much to too many.

cyber74
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cyber74,
User Rank: Light Beer
12/5/2012 | 5:05:27 PM
re: Cisco Preps for Layoffs


Cisco is strategically bankrupt -- and has been for a long time. The stock is priced about where it was 10 years ago.&nbsp;The home strategy (Linksys, Scientific-Atlanta) was absurd from the outset, but Chambers' pride won't let him admit a mistake. News of the layoff is merely exposing the emperor's new clothes.


If Chambers can't think of anything useful to do with the cash horde, he should return it to investors -- at a much faster rate than the 1.3% yield that the new dividend offers. Of course, as Cisco stock price falls, it becomes a dividend yield play... how ironic. &nbsp;

BigBro
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BigBro,
User Rank: Light Sabre
12/5/2012 | 5:05:26 PM
re: Cisco Preps for Layoffs


People ask "why now"?


I'd ask "did anyone really not see this coming!?!" &nbsp;A big layoff at Cisco was inevitable since *last* quarter's disastrous earnings call.


They had to announce it now because the next thing is to ask managers for lists of people to cut. (Thankfully, "ePM" will spit out the easy 5-10%. The question is whether they will do more than 10%, or about 7,700 people.)

Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:05:26 PM
re: Cisco Preps for Layoffs


Aw, someone deleted the spam post about dodecahedral whatnot.


I was gonna ask the guy: So, all of telecom can be fixed by a 12-sided die??

smackay
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smackay,
User Rank: Light Beer
12/5/2012 | 5:05:25 PM
re: Cisco Preps for Layoffs


Seen a couple comments about China-based vendors (eg Huawei) hurting here. Curious that no-one's said the HP "3Com" thrust might be driving down CSCO's prices - therefore margins - in Enterprise markets. Does anyone have the numbers - eg how much switch/router biz is HP now doing?

Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:05:24 PM
re: Cisco Preps for Layoffs


&gt; Curious that no-one's said the HP "3Com" thrust might be driving down CSCO's prices - therefore margins - in Enterprise markets.


It hasn't been said on this particular board, but reading the Wall Street reports, they all mention that it's both Huawei and HP that are driving down switch prices, with Cisco likely cutting down prices in response (hence their margin troubles).


Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:05:24 PM
re: Cisco Preps for Layoffs


DrDave, good point there. But I bet servers are one of the decisions Chambers and other Cisco execs defend to the death. Their answer to the commoditization of switches has been to go for these architecture plays, of which UCS is one. So, the servers and the switches become parts of one big architecture that is itself the "product."


Whether customers actually want to buy architectures is another matter. Randy Bias of Cloudscaling has been preaching the idea of commodity-built clouds -- he gave that speech at our Carrier Cloud Forum this week and did a video bit about it. It's a very non-architecture point of view.


http://www.lightreading.com/video.asp?doc_id=207676

Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:05:24 PM
re: Cisco Preps for Layoffs


Thanks for the perspective, Rush2112 &amp; Horse.&nbsp; It's certainly not a fun time but I do agree that doing one big layoff is going to be better than leaving a lingering sense of doom over everything. (Basiabasia's mentioned working at Nortel - that's the kind of counterexample I'm thinking of.)


From the talk here, it sounds like people's gut feel is for layoffs in the thousands, something around 10%?&nbsp;

somedumbPM
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somedumbPM,
User Rank: Light Beer
12/5/2012 | 5:05:23 PM
re: Cisco Preps for Layoffs


I have always been surprised over the years of the thought of the management team of at C as being top rate.&nbsp; What is that based on?&nbsp;&nbsp;With 70% margins it is pretty easy to look good and cover, or totally ignore,&nbsp;your mistakes.&nbsp;


I would consider their marketing and product support top rate, but little else.&nbsp; Their latest product upgrades&nbsp;(real stuff like switches, branch routers) are impressive, but in the past I have not&nbsp;recommended&nbsp;purchases based on my rating of a management team.&nbsp; There have been few instances where the C has been worth the premium -if you have competent staff.&nbsp; I know actual product talk is the last thing anyone wants to talk about when it comes to C, but somehow I think it is related to their revenue -at least it is now.


Did anyone look are server or consumer electronics&nbsp;margins before they went there and ignored the 70% margin products?&nbsp; Anyone think that going into the low margin&nbsp;server space and moving in on your partner's (HP -EDS, IBM) business,&nbsp;who&nbsp;place your 70% margin products as part&nbsp;of their solution a good idea?&nbsp;&nbsp;Is that what top rate management does?&nbsp;


Now they may have to work with margins more in the area of everyone else.&nbsp; It will be interesting to see how awesome they are going forward.

brtechy
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brtechy,
User Rank: Light Beer
12/5/2012 | 5:05:23 PM
re: Cisco Preps for Layoffs


Issue here is that it seems the extremely complex structure created by the councils and boards ended up attracting a mass of overlay management that in reality has little impact on what the company is trying to do but costs a lot, since on one hand they can take no real decisions and have no empowerment for most things and on the other they are not the ones carrying the pianos and bringing in revenue... This had to go. Hard to assess however how many "innocent people" the overlay structure and ineffective management dragged along with it.


I believe carefully analyzing the layoffs, even if having to wait for a couple of months to do it, is the right thing to do. With one big blow, if you don't plan it well, you'll end up doing across the board type cuts, and this is when intelligence disappears from the process and you frighten people up. In reality, I believe the majority of Cisco's field sales/services and hardcore engineering, who are both the heart of the company, will actually be greatly relieved for the movement after it's done, as the balance of people producing great results and people spinning their wheels until the next assignment is up unfortunately got out of whack.


Too early to issue a definitive statement about the quality of the decision making now, but it will certainly be possible to do so after CSCO announces how and where they will cut.


BTW, if all goes according to plan, in reality CSCO WILL be doing more with less, as everybody knows their targeting and goaling are extremely aggressive, and I doubt this will change anytime soon. Even after all of the cuts I bet targets for next fiscal will be significantly higher than current one.


&nbsp;


brtechy

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