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By | Paul Kunert 12th July 2011 11:36

Cisco may slash 10,000 jobs

Company-wide axe massacre set for next month

Cisco may be bigger and bolder in its cost-cutting plans than first anticipated: it has been revealed the firm is getting rid of close to 10,000 staff worldwide.

The initial figure touted by Gleacher & Co analyst Brian Marshal yesterday was half that, which he estimated would cut the networking behemoth's annual expense base by $1bn a year.

However, Bloomberg today reports that Cisco may actually fire up to 7,000 staff by the end of next month – the start of the vendor's fiscal 2012 – and provide incentives for around 3,000 employees to take early retirement.

This would equate to some 14 per cent of the workforce and more than meet the targeted $1bn in cost savings set out by CEO John Chambers in a Q3 conference call with analysts, the firm's third consecutive set of disappointing results.

Cisco has already chopped off chunks of its ailing consumer division, with the Flip video camera product group going the way of the dinosaurs, and its Linksys business rumoured to be up for sale.

The core product groups are also challenged as worldwide first quarter numbers from Dell'Oro Group show, with Cisco losing more than 8 per cent market share in Layer 2/Layer 3 Ethernet switching as HP grew its footing.

Chambers has already acknowledged that Cisco needs to improve operational execution to make decisions in a more agile manner.

The restructuring has begun in earnest, The Register has learned, with the top brass choosing their management team. Early sight of one change is that global channel veep Thiery Drilhon is set to pass the baton onto another exec, but it is not clear if Drilhon is leaving the firm. ®

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