Feeds

Cisco needs to slash 5,000 jobs, says analyst

Shake-up looms as global channel boss waves goodbye

  • alert
  • submit to reddit

Boost IT visibility and business value

Cisco may fire up to 5,000 staff this August under a restructuring plan, according to analyst Brian Marshall at Gleacher and Co.

This equates to 7 per cent of the networking Goliath's global base of employees, which stood at more than 73,000 in April.

"While this is a difficult decision to make, in our view it is required in order to maintain competitiveness of Cisco going forward," said Marshall in a note to investors this morning.

The move would enable Cisco to hack around $1bn in cost off its p&l each year, boosting fiscal 2012 earnings per share by about 8 per cent, the analyst said.

"This would not be the first time the company has cut jobs: as the bubble was bursting, the company cut 8,000 people, dropping to 36,000 in April 2002 from 44,000 in March 2001," he said.

Company insiders reckon Cisco is in the middle of an organisational restructure which should be unveiled in August at the start of the firm's fiscal 2012.

One change – yet to be made public – is that Thierry Drilhon, veep of worldwide channels, is set to leave the role but it is not yet known if he will exit the firm or take up another position inside Cisco.

President for Europe Chris Dedicoat is currently selecting his management team but has yet to announce direct reports, say company sources.

CEO John Chambers blogged in April that he wanted to shake up the company following three quarters of disappointing investors, claiming the company needed to be more disciplined in operational execution.

"We have been slow to make decisions, we have had surprises where we should not, and we have lost the accountability that has been the hallmark of our ability to execute consistently for our customers and shareholders," he said.

To fix its problems, Chambers said Cisco would not tinker with the product areas that are not broken, and set out priorities: "leadership in core routing; switching and services; collaboration; data centre virtualisation and cloud; architectures; and video".

Cisco refused to comment further. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.