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Cisco to reduce headcount

Between 5,500 and 8,000 jobs to go

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Updated: Cisco is planing to cut its headcount by five per cent as part of its plan to adjust to a slowdown in sales in the networking industry.

The loss of full time jobs is likely to be carried out through natural attrition and will occur in parallel to a hiring freeze and restrictions in the number of contract workers it employs.

Reuters has quoted an unnamed drone within the company who gives an account of a recent address by its chief executive, John Chambers. The Cisco head Borg was answering a question on whether the job cuts at Cisco will follow those in other IT firms.

"His answer was that in any organisation there is usually about five percent of the work force that is not in the appropriate position," the source told Reuters.

Cisco currently employs around 48,000 people including around 4,000 temporary workers.

The move to cut staff comes against the backdrop of an announcement by Cisco last month that it had failed to meet revenue and profit forecasts for its second quarter. A slowdown in the US economy and reorganisation amongst US service providers, a key market for Cisco's high-end routers, have hit its revenues far more than it first predicted, and caused it to predict that revenue for the next two quarters will also be flat. ®

Update:

Cisco has issued as statement on job cuts, available here, which said it intends to shed 3,000 to 5,000 regular workers through consolidating jobs as well as voluntary or "involuntary attrition" (that's redundancies to you and me). Between 2,500 to 3,000 temporary and contract workers also face the boot.

As a result of the job cuts, Cisco expects to take a one-time charge of between $300 million to $400 million by the end of its fourth quarter. Other cost cutting measures will slash spending in areas such as contract services, travel, and marketing expenses by the networking giant.

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