Update: Cisco Systems reportedly to cut 5,500 jobs

Cisco Systems said after the close of trading Wednesday that it will cut 5,500 jobs as part of and ongoing shift toward services, software and cloud-based technologies.

Earlier in the day, the technology news publication CRN said Cisco would lay off 14,000 employees, or close to 20 percent of its workforce.

Cisco made the job-cut announcement as part of its fiscal fourth-quarter results.

Cisco had around 73,000 employees at the end of April, according to a Securities and Exchange Commission filing.

The layoffs stand to be one of the biggest imprints of Chuck Robbins’ tenure as Cisco’s chief executive. Robbins, who took over from longtime Cisco CEO John Chambers in July 2015, has been working to move Cisco more into software, services, cloud-based networking and security technologies as the company’s bellwether hardware business has shown signs of slowing down in recent years.

Announcing the layoffs at the same time of its fiscal fourth-quarter results wasn’t unprecedented for Cisco, as the company implemented layoffs at the end of its 2013 and 2014 fiscal years, and at the end of the other past fiscal years.

Cisco is the latest Bay Area tech titan to put big job cuts into effect, following HP Inc., which in September 2015 said it would cut 33,000 jobs over a three-year-period, and Intel’s announcement in April that it would shed 12,000 jobs this year.

Cisco has re-gained some faith from investors of late, as the company’s shares have risen more than 11 percent this year to $30.30.

Photo: A sign with Cisco’s logo outside the company’s headquarters in Santa Clara. (AP/Paul Sakuma, File)

 

 

 

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  • almundayy58

    cisco’s layoff’s like with all other big companies do it for the very shorrterm finanical gains for that quarter…..so like who will be left….exec’s who don’t know anything….managers who many don’t really know anything…..hope whatever technology these companies need to develope WILL NOT BE DONE offshort

    • Miffler J. Tripod

      Don’t worry, it will bwe done by a foreigner who doesn’t speak the language and can be paid 1/2 the wages and minimum benfits.

      • almundayy58

        just wonder of all the layoffs…how many are american born compared to ones on visa’s or became perm residents…..

        • hoapres

          Here is how it works at Cisco.
          The layoffs will first target those between 5 to 15 years of service with a severance package likely to be between 6 months to a year of pay along with continued medical.
          The Americans get laid off first. Then the h1bs

          • Kungaloosh

            It used to be that Cisco had a spare building near McCarthy Ranch where the laid off employees could start their job search from & get outplacement services.

          • hoapres

            That was then. This is now.
            Don’t think that will be the case this time. However, I could be wrong.

          • Mark

            Not very many Americans with “only” 5 years of service at Cisco. Last time Cisco hired any non-trivial numbers of Americans was back in the early 2000s.

        • Miffler J. Tripod

          Good question.

          • hoapres

            If history is any guide then expect 75% to 90% American born, 25% to 10% h1b.

          • Miffler J. Tripod

            Thanks to Trump and people like him for outsourcing our native-born Americans’ future in the interests of personal profit. Our world is truly a corporatocracy.

  • Sal Donovan

    Hmm, H-1B visas involved? Probably, goodbye to more American jobs, Indian H-1B visa holders are waiting in the wings in one of the many ‘Body Shops’ around the country.

  • Ekul1021

    So where is HilLIARy to condemn this? Oh wait, Cisco endorsed HilLIARy along with other Tech companies who want to keep outsourcing until there are barely any jobs in California.

    • hoapres

      If the Indians do the work in India that is far better than all of India coming to the US.

      • Ekul1021

        It works if Cisco completely moves over there and begone from America.

        • hoapres

          Works for me.
          The best thing for America is for all these companies with h1b workforces is to get out of here.

          • Ekul1021

            And not to mention cannot buy any American property either especially what that nut job who owned Cisco did to the Half Moon bay beaches too.

          • hardyharhar1603

            Sounds like you mean Vinod Khosla who founded Sun Microsystems. Nothing to do with Cisco.

          • Ekul1021

            Same type of brat-like rich 1% but will vote for the most anti-American bills just to have cheap labors.

  • hoapres

    Cisco is h1b infested. The Americans are long gone

  • hoapres

    This is just the beginning. MAJOR layoffs are coming in the ENTIRE tech sector.

  • toro95037

    The comments below are off the mark. Have you actually worked there? I too am anti H1B visa, but that’s not whats going on. Data center routers are becoming commodity pricing. The margins are shrinking. The new emphasis is in network threat detection and threat management. This is a shift from hardware manufacturing into software development. Many of the base employees do not have the requisite background to make the shift to the new paradigm.

    • hoapres

      Tough Luck.
      That means the company can TRAIN their soon to be laid off employees to do the work.
      Problem solved.

    • hoapres

      >> Data center routers are becoming commodity pricing. The margins are shrinking. <> This is a shift from hardware manufacturing into software development <> Many of the base employees do not have the requisite background to make the shift to the new paradigm <<

      A moot point since there won't be many jobs at the "new" Cisco. With that noted, a select few of the current Cisco employees will have the EXACT knowledge that is going to be needed.

    • ArnoldLayne

      So, core routers cannot be commoditized, as data center can.

      • hoapres

        Core routers are commoditized.

        • ArnoldLayne

          What are the white box core routers? I said core not edge not data center.

          • hoapres

            O.K.

            But Juniper Networks might say otherwise.

  • Speakerofthe House

    H1B immigration act (Hart-Celler). “In total, 74% of Democrats and 85% of Republicans voted for passage of this bill.” History sucks, doesn’t it #MoronsForT(rump)?

    • Glaird

      Assuming your stats are correct, it took a Democratic president to sign that legislation.

  • hoapres

    I hear that 14,000 is just the initial layoff. Another 7,000 could be by the end of the year.
    Look at 30%+ of the Cisco workforce to be gone by the end of the year.

  • hoapres

    Hate to give everybody the bad news, but the ENTIRE tech sector is going to have a BIG meltdown in terms of employment.

    1. The startups-Most are running out of gas (e.g. money). You can go only so far with capital and no income. Once you have been a startup for over 24 months then the investors want some indication that they are going to get their money back.

    2. The hardware companies such as HP, Cisco, etc.-As pointed out the profit margins are low and it is becoming a commodity. That means the jobs are going to be sent overseas.

    3. The large software companies such as Facebook, Google-Their profits are not very secure in that if the general economy does even a mild slowdown their profits will rapidly shrink. The other problem is that their stocks are overpriced with PEs of over 20 to 1.

    • ArnoldLayne

      1. How do you know that most are running out of money? Any data?
      2, 3 – Wild speculation

      • hoapres

        1. I have seen some of the books.

        2,3. Not really wild speculation. The P/E ratio for tech comp is pretty well known and the profits are available from stock market reports. Google and Facebook make their money on ad revenue. If the economy has a slowdown then their ad revenues will go down.

        • Kungaloosh

          There’s no need to see the books.

          Look around & notice what’s been going on…

          The recruiters pushing today’s hot opportunity started to disappear in January. Nobody seems to be able to explain the slowdown.

          Rental prices. Over the past couple of months, rental prices where I used to live have quietly dropped.

          Job postings that have remained up for a year or more.

          It looks like the start of a slow meltdown.

          • hoapres

            The slow meltdown might become rapid in 2017.

          • Mark

            Yeah no kidding, I don’t even hear from recruiters with their obnoxious “build us a world class product on a 3 month contract” ‘requirements’ anymore like I used to be spammed at roughly at the rate of 1 a week. And I’m pretty darn sure the recruiting community didn’t magically smarten up.

            So there’s definitely a slowdown a’foot. If not worse.

          • Kungaloosh

            In the past, the phone starts ringing after Labor Day with the “Urgent Requirements” that have been neglected all summer long. I doubt the phone will be ringing this September.

            Prior to Labor Day, the only calls I’ve been receiving ALWAYS involve an Indian body shop, hawking something at TCS. Thanks, but no thanks.

            I am starting to see something new… “Software Engineer” jobs are being pitched as “Software Engineer – New Grad”.

            There are still what @hoapres:disqus calls “Non-Jobs.” Jobs that have been posted for 2 years or more.

            I don’t think you’ll see any improvement in employment opportunities after Labor Day.

        • ArnoldLayne

          But right now those two are CASH COWS. A little slowdown won’t hurt them- at least those two, maybe only those two…

          • hoapres

            Actually it will depending on the elasticity of advertising revenue received by Facebook and Google based on the earnings of those that purchase the ads.

            That’s the big question.

  • hoapres

    Expect a similar announcement from HP in the near future.

    • Kungaloosh

      You forgot one: Yahoo!

      • hoapres

        O.K.
        But that was a given.
        Yahoo is pretty much going out of business but HR is still advertising jobs.

        • Kungaloosh

          Yahoo had to be directly mentioned. There’s at least one person skimming these replies who forgot that Yahoo! jobs will only be around just long enough for Verizon to take control.

          If you work at Yahoo!, Verizon is going to extract every cent of that acquisition. You’d better have your resume ready.

          • hoapres

            True
            But you have to hang around at Yahoo until the end to get the severance. You definitely need to have that resume handy.
            It’s going to be rough for the Yahoo software engineers as there isn’t a shortage of software engineers in search.

  • hoapres

    As an aside, the contingent workforce being contractors at the tech companies is often greater than the number of full me employees.

    What this means is that you are disposable. Work an hour get paid an hour.

    Had a bunch of newbie techies that were getting laid off the first time from a $20 an hour IT job and we told them for long term STABLE employment:

    “IT’S HEALTHCARE STUPID”

    One of the newbie techs took the advice and became an RN doing a LOT better than those trying to remain in tech.

  • hoapres

    For those of you that know me from the old Dice discussion boards.

    OP should abandon IT

    Best of Luck

  • hoapres

    For those Cisco employees that are being laid off. The vast majority will be those with between 5 to 15 years of service with ages of probably between 35 to 50.

    Now, I am going to be accused of being “doom and gloomer” BUT plan on EXITING tech.
    You are going to get a decent severance package so go out and try to find another tech job.

    BUT If you don’t find another tech job within 6 months then best plan on doing SOMETHING ELSE to make money.

    Your tech career is OVER.

    That statement is based on LOTS of people over 35 (for sure over 50) that have been out of tech work for over 6 months. For every ONE that made it back into tech, I am pretty sure that I can name a HUNDERD that didn’t make it back into tech.

    • Angel

      Probably so Cisco doesn’t have to think about their Retirement.

    • Mark

      Cisco hasn’t hired US citizens in any meaningful quantity since roughly 2000-2001, so you’re mostly looking at 38-40-year-olds as the minimum age in technical roles. Those people are obviously going to be dumped.

  • hoapres

    A friend of mine just got a call from a tech recruiter who is being laid off due to lack of production. The friend was supposed to start a contract at Cisco which (no surprise) just got cancelled. The tech recruiter source of income was placing contractors at Cisco.

  • hoapres

    I am not picking on Cisco as all the major tech employers do the same thing.

    They go out and make claims of abundant number of tech jobs and go out peddling to Congress and the public claims of “80K+ tech jobs” (That is what Dice claims)(Dice being a major job board for the tech industry)

    What they don’t tell you is that it is really 80K+ tech job ads to which at best 8K actually exist.

    It works like this:

    1. Cisco needs to fill a job. (Well not now)

    2. Cisco uses 10+ agencies and each agency puts out a job ad. Each agency’s job ad is considered a “real job” leading to claim of Dice 80K jobs when in reality it is closer to 8K

    3. Cisco won’t discontinue the job advertising even after the job no longer exists. In other words, it is fake.

    This isn’t just Cisco but the ENTIRE tech industry.

    Then when YOU (with YOU being a tech worker) can’t find a job then your non tech neighbors basically tell you “Well you shouldn’t have a problem because hundreds of thousands of jobs exist in tech. Just see all the job ads”.

    • Angel

      It’s true, I think they still have job ads on Indeed and monster lol

    • Andrew Quang Nguyen

      It’s true, I really appreciate you stand up for this.

    • Mark

      Often the “job posting” is just for immigration compliance reasons, ie: the PERM process. Still gets replicated by 10+ recruiters nonetheless, who are hoping to score a commission by recruiting someone to a job that doesn’t exist!

  • hoapres

    1917- “I want you to join the US Army”

    2017- “I want you to train your Indian h1b replacement”

    • sssgadget

      Looking at your 20000 comments ranting just about H1Bs you seem to be mentally disturbed and racist. Do you need help? Maybe a psychiatrist? Commenting on Mercury News isn’t going to solve anything. Why don’t you get off the computer and visit a doctor.

      • hoapres

        Tough Luck.

        • sssgadget

          That’s best you can come up with?

      • Andrew Quang Nguyen

        Sorry, but I’m tired with H1bs frauds, many of them don’t have a real degree.

      • Mark

        Pointing out the truth that H-1Bs have been used to decimate the US tech workforce isn’t racist nor disturbed. The whole idea that foreign guest workers would be allowed to displace qualified US citizens from jobs is disturbing. And even 2nd and 3rd generation US citizens with Indian/Asian ancestry are highly damaged by H-1B abuse. We have plenty of stories of this occurring, for example, where a company is highly interested in an Indian-American candidate, but withdraws their interest when they learn that no visa sponsorship is required.

  • Angel

    It’s time to go to the Bar. lol

  • Reed More

    Per the earnings call, it’s 5,500 people worldwide, not 14,000. CRN got it wrong and all the other pubs just repeated it.

    • hoapres

      5500 to start.

      However the voluntary severance package is likely to be offered to 3o%+ of the workforce. Should over 5,500 people take the buyout then no effort will be made to restore the job cuts in excess of 5,500

 
 
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