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Summary:

Updated: Cisco on Friday said in a filing that it planned to close its Broadband Telephony Services unit in the Richardson, Texas, office and will lay off 129 employees between Oct. 8 and Dec. 12. The networking giant filed this information with the Texas Workforce Commission […]

Updated: Cisco on Friday said in a filing that it planned to close its Broadband Telephony Services unit in the Richardson, Texas, office and will lay off 129 employees between Oct. 8 and Dec. 12. The networking giant filed this information with the Texas Workforce Commission on Oct. 10. In its letter to the commission, the company wrote, “A decision has been made by Cisco Systems Inc. to cease operations in its Broadband Telephony Services operating unit within its facility located at 2200 East President Bush Highway, Richardson, Texas 75082-3550.”

Richardson, near Dallas, is where Cisco opened a new data center in June 2008 as part of the company’s data center consolidation plans, and is also home to several other Cisco business units. For perspective, Cisco employed 66,129 people as of July 28, according to its filings with the SEC, so this is a small number of employees. I’ve asked Cisco for more details on the notice as I’m not sure if this is indicative of weak broadband telephony sales, the macroeconomic climate or simply a consolidation effort. I’ll update with more information once Cisco gets back to me. Updated below

Cisco issued a statement that read:

Cisco continuously evaluates its businesses to align human and capital resources to address key growth opportunities and improve efficiency. As part of our ongoing business processes, Cisco continually prioritizes its resource allocations to properly align those resources with revenue generation, profit growth, and market share opportunities, positioning itself for long-term sustainable growth.

That’s typical corporate speak for something that’s not making much money anymore, but I didn’t get information from Cisco on what the Telephony Broadband Services unit is . They’ve bought a lot of companies in Dallas over the years and my guess is these layoffs were related to one of those buys. Any help readers?

  1. Stacey – Have you checked into the other big players in the Telecom corridor down there? Cisco is perhaps the first of many others cutting back. “Might” shed some light on your question “if this is indicative of weak broadband telephony sales, the macroeconomic climate or simply a consolidation effort.” And would be interested in knowing too!

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  2. My buddy at Cisco claims that it was consolidation.

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  3. As employees are shown the door, an employer is wise to hang onto their e-mail records. –Ben http://legal-beagle.typepad.com/wrights_legal_beagle/2008/10/retain-e-mail-of-former-employees.html

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  4. Stacey,

    That BU was focused on their BTS 10200 product line, the one that was being used to sell Residential Telephony to cable companies. It originated from the IPCell acquisition around 1999-2000 (same day as Vovida acquisition). This probably won’t be the first of the “consolidation” announcements from Cisco as they move into FY09 and refocus around areas where they have strength or can be very innovative.

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  5. Om,

    My acquaintances in Richardson area(TX) got laid off, they were informed that the division has been dissolved and nothing else. They have been given a 2 month notice, they are free to find positions in Cisco or walk out at the end of notice period.

    Not a good deal for fresh graduates who just joined Cisco, including their H1 hopes.

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  6. Stacey Higginbotham Monday, October 13, 2008

    Thanks, Don. And I’ll keep an eye out for further RIFs in the area.

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  7. The number is more likely to be 154….

    Very sad for those fellow Telephony guys….

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  8. I heard that if you were part of the “transition” team and worked an additional 6 months, you received an “award” = 6 months pay + 2 months to look for a new job within Cisco + 4 months severance . Can anyone confirm? That’s a pretty good package if I’m correct…

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  9. The bigger story here is: What’s happening to the softswitch vendors? There has been enormous consolidation and a major shakeout in this market over the last five years. Whose softswitch are all the Cable Telephony guys using?

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  10. Not sure if it’s still the case, but for a while the Time Warner Digital Phone system was based off the BTS 10200 softswitch. I don’t believe they were making much traction with other carriers, but others can chime in with details there. The softswitch providers were struggling like crazy because they all brought in ex-telco people to run the operations, and they expected to be able to create business models similar to the old lock-in Class4/5 models. But this just wasn’t working with the constant pace of technology, and constantly fluctuating standards.

    As far as the severence packages, Cisco’s actually been very good to employees ever since the 2001 layoffs. Typically they receive a package that is equivalent to 6 months salary. It’s often called a “2/4 plan”, where you have 2 months to find something else internally, and if that doesn’t work out, you then get an additional 4 months after you’re outside the company.

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