Cisco to Slash 6500 Jobs – Nine Percent of Headcount

Cisco Systems Inc. revealed plans to shed about 9% of its staff in a bid to trim its operating costs and improve the company’s profitability.

The networking equipment maker said the impending cuts will save the company about $1.3 billion in restruturing charges over several quarters. Some 2,100 employees will be leaving the company on a voluntary early-retirement programme, while the remaining 4,400 employees would be laid off.

Cisco Systems Inc. revealed plans to shed about 9% of its staff in a bid to trim its operating costs and improve the company’s profitability.

The networking equipment maker said the impending cuts will save the company about $1.3 billion in restruturing charges over several quarters. Some 2,100 employees will be leaving the company on a voluntary early-retirement programme, while the remaining 4,400 employees would be laid off.

It also said it will sell a Mexican subsidiary to Foxconn Technology Group.

According to a report by the BBC, Cisco is facing increased competition, and said it needs to overhaul the way it operates and focus on core businesses.

Chief executive officer John Chambers said earlier this year that Cisco would look to exit non-performing or less profitable businesses, and refocus on its core networking operations.

Analysts have complained that the company expanded into too many areas at the expense of its main markets.

In May, Mr Chambers announced his intention to shut Cisco’s Flip video camera unit resulting in 550 job losses.

The process of repositioning the business is set to continue in the coming months.

The company said it will pay all the affected employees severance pay and give them help to find other employment.

Cisco does not expect any job losses to come from its plans to sell its television set-top box manufacturing facility in Juarez, Mexico.

Instead, 5,000 employees will be transferred to contract manufacturer Foxconn in the first three months of the 2012 fiscal year.