Cisco said to trim China staff on slow sales

Cisco Systems, feeling the pinch of China’s drive to become independent in technology, Monday confirmed reports that it is flattening its top-level management in China.

Falling China sales, due to a shift from foreign to local producers in China, is causing the San Jose networking giant to trim its executive staff there, the Wall Street Journal reported on Friday.

The investment firm Morningstar also reported the high-level cuts on Saturday.

Cisco confirmed the reports, but the move also appears to reflect a leveling out of top management across the board under incoming CEO Chuck Robbins, who is trimming top management to speed decision-making.

Owen Chan, Cisco’s leader in China, announced changes to his team in an internal memo, the company said. “As a matter of policy we do not comment on specific personnel matters, so I’ll decline to confirm specific names or titles,” Nigel Glennie, Director Global Corporate Communications for Cisco, said in an e-mail.

But he said that the memo “said the new team’s structure provided a flattened reporting line, enhancing the ability to execute and respond to market requirements.”

The Morningstar Advisor said that “several senior executives in China have been asked to step down, including Cisco’s China president and vice president.

Cisco beat market estimates in the most recent quarter, with sales slides in Russia and China more than offset by overall gains.

The revelations about National Security Agency snooping in China and elsewhere have put major U.S. companies on the defensive, as Chinese competitors seek to gain an advantage, according to analysts.

Beyond the so-called “Snowden effect” of diminished trust in U.S. companies caused by NSA leaker Edward Snowden, there is simply a push under President Xi Jinping for China to build its own brands.

Some of the sales Cisco lost in China were picked up by Huawei, according recent reports.

Photo: Cisco sign at San Jose headquarters (Paul Sakuma, Associated Press)

 

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  • bluelagoon bixby

    Good !!! US companies start to pay for their price to outsource jobs to china.

  • sociopathic

    Makes sense.

    Falling China sales, due to a shift from foreign to local producers in China

    After China has copied what it needed, why should it continue to pay companies like CSCO for things like IP?

  • CO

    Wish they would have all bios firmware and hardware development done in the USA on their network equipment. See what happen in the last 20 years first it was American worker now it technology itself who needs the American company ?

    • juandotcom

      They’ll employ thousands of workers in the US, just as long as they have an H1B

  • zenjitsuman

    Pull jobs out of China if they won’t buy from us. That is fair trade

  • juandotcom

    This is the era of reckoning. The only way they’ll profit in the future is through corrupt government deals. The same is going to happen to Apple…give it a few years though.

  • nvtncs

    They, the Chinese, squeeze the fortune 500 like a slice of lemon then throw it away. Intel will be next. Poetic justice, exactly what the fortune 500 deserve.
    Next, the Chinese will sell their own products in the US for a fraction of the price of the American counterparts and Cisco and Intel will file chapter 11. More poetic justice.

  • pundaimavanu periyarpayalu

    china is a rogue nation
    completely ban china

  • pundaimavanu periyarpayalu

    for three decades Nixon (ex President) allowed excess trade imbalance with china and allowed china to manufacture for US – In return, Chinese girls converted to Christianity and became massage parlour girls to please Americans

  • Smith Jackson

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    Pass4sure 300-207
    Pass4sure 640-722

 
 
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