Did Cisco Cut Deep Enough?

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ycurrent 12/5/2012 | 4:58:46 PM

re: Did Cisco Cut Deep Enough?

Improving Cisco the company vs. Cisco the stock seem to be on separate paths:

"Had management acknowledged that the business was mature, cut growth expectations, and instituted a more significant dividend policy, some of their current issues may have been avoidable,"

Would Wall Street really be pleased with more significant dividend policies? Is Cisco a slow growth company due to its size or its lack of focus/execution in strategic growth markets?

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akvasu 12/5/2012 | 4:58:45 PM

re: Did Cisco Cut Deep Enough?

Often I wonder how many of these analysts actually thing from the Employee point of view - Does only the stock value matter? What about the Employees!

The company is doing well, it has a deep cash reserve too. Its taking drastic steps mostly because people are focussing only on the money they might make, rather than the money the Employees need to make! I'd like to see the stock holders getting laid off somplace instead of employees!

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Rush21120 12/5/2012 | 4:58:44 PM

re: Did Cisco Cut Deep Enough?

Cisco's slow growth is due to the lack of new catalyst product revenues.  Most of the older product family lines are firing but new ones haven't  in the past 2 yrs.  Cisco needs to return to it's core business instead of M&A.   The challenge Cisco has is that it already let allot of its core talent for R&D go long ago. 

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crazy4geek 12/5/2012 | 4:58:42 PM

re: Did Cisco Cut Deep Enough?

6,500 (which includes the 2,100 Early Retirment)

5,000 - sold off to FoxConn

500 - flip

====

12,000 people + whatever cuts happen in the ROW in next Quarter.

 

Pretty deep cuts I'd say and banking on the fact that Cisco isn't done - I bet they'll do more in Q1.

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crazy4geek 12/5/2012 | 4:58:41 PM

re: Did Cisco Cut Deep Enough?

RE: Would Wall Street really be pleased with more significant dividend policies? Is Cisco a slow growth company due to its size or its lack of focus/execution in strategic growth markets?

 

A big part of the problem is their size.  To expect $40B company to grown double digits year over year isn't possible organically.  That would be like adding a company the size of Juniper to it's growth each year.  Not possible, organically at least.  I think the company need to reset Wall Street expectations or the layoffs will just continue until there isn't enough intellectual property to sustain the company.

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crazy4geek 12/5/2012 | 4:58:41 PM

re: Did Cisco Cut Deep Enough?

In response to akvasu - Right on!

The problem is workers report to their management but the execs report to Wall Street, so the employees have been, are and will continue to be the sacrificial lambs.

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ycurrent 12/5/2012 | 4:58:41 PM

re: Did Cisco Cut Deep Enough?

Here's the problem with the "large number" or too big to grow excuse.

Do you think there is $4-$6 billion of growth in the markets where Cisco plays every year? If the answer is yes, then Cisco's problem is execution and ability to capture more share from all its key market areas.  If the answer is no, then Cisco should not be focused on those markets.

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crazy4geek 12/5/2012 | 4:58:40 PM

re: Did Cisco Cut Deep Enough?

I think the problem has been too many adjacencies.  But you still can't negate the fact that growing double digits was much easier as a smaller company then when $40B.  There is an excellent book titled " Stall Points" I highly recommend it!

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gtchavan 12/5/2012 | 4:58:40 PM

re: Did Cisco Cut Deep Enough?

Why is Google developing its own hardware? 

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crazy4geek 12/5/2012 | 4:58:39 PM

re: Did Cisco Cut Deep Enough?

Ahh, didn't say it was gospel - just a good, interesting read ;)

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