After preparing observers for massive layoffs last week, Cisco (NSDQ: CSCO) says it will cut 6,500 jobs, or roughly nine percent of it global workforce, the company announced. Included in the 6,500 will be about 2,100 staffers who took a voluntary buyout. The San Jose, CA.-based company expects to absorb writedowns of under $1.3 billion, which will be spread over several quarters. It expects charges of $750 million by fiscal Q4.
Updated: Cisco will also eliminate another 5,000 staffers from its payrolls as part of a deal to sell its set-top box manufacturing facility to Foxconn, which the company included in a separate announcement.
While not as massive as the 10,000-person reduction Bloomberg reported was coming last week, the company is looking to get out of certain businesses that are not producing as much revenue. As one Gleacher & Co. analyst noted in an interview with Bloomberg, sales of switches and routers, which comprised more than than half of revenue last year, have been falling lately.
In a surprise move last spring, Cisco abandoned its consumer-facing businesses by shutting down its Flip Cam operations. At the time, CEO John Chambers, noting the changes in networking and in the video space, said that the internet had “taken on an entirely new form– and our growth strategy has been based on capturing the incredible opportunity afforded by this massive demand for the network. Many say that in the face of this expansion, Cisco needs more discipline. I agree.” He added that Cisco was too slow in reacting to the changes, but would work to change that perception. Release