Posted on 08/19/2016 7:28:29 AM PDT by Lorianne
Every summer from 2011 through 2014, with icy routine, when Cisco was closing out its fiscal year, it revealed mass job cuts. In July 2011: 6,500 layoffs. In July 2012: 1,300 layoffs. In August 2013: 4,000 layoffs. In August 2014: 6,000 layoffs. A veritable layoff machine.
In the summer last year, with the new guy, Chuck Robbins, getting his feet on the ground, it skipped the layoffs. But the layoffs now being planned are a doozie.
The aging Silicon Valley icon will lay off between 9,000 and 14,000 employees globally, “multiple sources close to the company” told CRN. If it cuts 14,000 people, it would be the largest single layoff announcement it its history. They would amount to nearly 20% of its 73,000 employees.
Many early retirement packages have already been offered to employees, the sources told CRN. The announcement is expected to come within the next few weeks, they said. Cisco will report earnings today after the market closes, and that would be the next opportunity.
Cisco refused to comment when CRN reached out.
The cuts are the result of Cisco’s trying to make the move from its old hardware business – including the big routers for the telcos – to software and services, and to the “cloud.”
“They need different skill sets for the software-defined future than they used to have,” one source familiar with the situation told CRN. “In theory, the addressable market could be higher and margins richer, but it will take some time to make this transition.”
(Excerpt) Read more at wolfstreet.com ...
But the economy is doing so well......(/sarc)
Just saw a pretty good movie recently regarding what is happening and will probably happen a lot in the new future:
Company Men
I highly recommend it.
It’s kind of interesting for me. Being in IT contracting for about half of my IT career has put me in 17 companies since 1983. Jobs ending is part of the job for me. I’d rather it doesn’t happen every few months, but for me it’s an event kinda like getting a bad cold. It happens, but it is not life changing.
How many US ‘layoffs’ will result in foreign hires?
It’s a shell game when they say ‘global’ layoffs. Who is being laid off where and what it their job?
Here’s the problem: Cisco hardware for large-scale networking is too expensive. There are now vastly cheaper alternatives from multiple companies even in Silicon Valley.
The cuts are the result of Cisco’s trying to make the move from its old hardware business – including the big routers for the telcos – to software and services, and to the “cloud.”
“They need different skill sets for the software-defined future than they used to have,” one source familiar with the situation told CRN. “In theory, the addressable market could be higher and margins richer, but it will take some time to make this transition.
When a larger % of the population, schools and other organizations find out that they can use Chromebooks and the clouds for personal and organization use. There will be less and less demand for the Cisco type products.
If the economy gets any better we’ll all be unemployed.................
Treasury stock...they’ve all been propping up their market value by buying their stock off the market.
Offshore the hardware end of the business to asia, and import some H1-B workers, “immigrants”, and “refugees”, because they’re aren’t enough “qualified” Americans to fill those jobs, even though they they just shit-canned all of the “qualified” Americans who were working for them.
Sounds like a plan to boost the bottom line by privatizing the profits, and socializing the costs.
Buy NVIDIA stock.
“Treasury stock...they’ve all been propping up their market value by buying their stock off the market.”
DING DING DING DING DING WE HAVE A WINNER!!!!!!!!!!!!
Good luck trying to chase the cloud computing business that Amazon is already doing very well in and Microsoft already has made gigantic investments in (and making good money at it, too).
Amen! Cisco may be like the buggy whip and buggy maker’s in the early 1900’s.
Amazon cloud re photos and Kindle is incredible for this 70+year old user. The Google clouds work well also.
Yes and No Dave. (Full disclosure, I own a business that resells Cisco equipment and have worked on Cisco in the IT world for over 20 years )
Cisco has always had competitively priced products across the spectrum. You can buy a $300, $1000, $5000, $20,000, or $100,000 Cisco switch. They all have a purpose and individually are very competitively priced in the market. Where the perception of “Cisco is expensive” comes into play is when Cisco partners pitch the $20,000 solution when a $5000 solution will work just fine.
We primarily sell into mid market business and education space and we’re almost always the low bidder with Cisco going against all of the competitors out there.
Back to the article referenced, Cisco still owns the route/switch market, but similar to PC’s back in the 90’s compared to the 2000’s, a business simply doesn’t need to replace them every 3-5 years. They don’t need 10GB to the desktop and the 1G switches they bought 10 years ago are still working just fine.
Cisco is growing in the subscription and cloud based areas and the revenue from servers, datacenter, route/switch are all declining due to less churn on the gear.
I don’t know where the layoffs will occur, but I suspect they’ll be reductions in the legacy product areas due to the sales not being as high in that area.
Thanks for the feedback.
I’m out of the loop re business and what is needed.
As in most situations, creative people, not the ones trying to $crew their customers, can find often ways to stay in business if they take care of their customers.
It really depends if we start to see the transition from IPv4 to IPv6. A lot of the networking hardware out there still can’t handle IPv6, so Cisco still may have a market for network backbone and server farms that need to transition to IPv6 support.
The whole technology industry is adapting to the new reality that the migration to the cloud and open source has made most information based systems technology a commodity.
3 years ago, there were 5 viable competitors in my tech sector. Today, there are 225 cloud based competitors in the sector.
Ya beat me to it. One of the few things the left is correct about is that big business is cutting the low-end employees to feather their own paychecks, and this is a prime example. Stock at a near-decade high, household name in the tech world, and they slash domestic jobs by the scores...what you want to bet that the majority of those 14,000 who will now work retail and fast food the rest of their lives will vote Democrat for being screwed over?
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