6 ms·

Cisco to layoff 6,500 employees

21 points by thematt 15y ago

rednaught 15y ago
No longer is it verboten to mention Juniper and HP in the same breath as Cisco when talking about quality networking equipment. Hopefully, Cisco can get back on track and refocus on it's core networking products. Interesting that they are letting go 6500. "6500" is their workhorse networking device but has been in market for about a decade now and needs a serious overhaul to be competitive again compared to Juniper's MX and the Brocade XMR devices.
- tom_b 15y ago
  I have a neighbor who manages Juniper support engineers. These engineers are typically working onsite at Juniper customers. He has been almost constantly recruiting new support engineers (who seem to either have CCIE certs or a similar experience level) for probably 18 months. Since this recruiting is primarily for new customers, I would guess that Juniper is doing quite well competing against Cisco.
patio11 15y ago
Of the 6,500 employees being cut, Cisco expects 15% to come from the vice president level and above. ...
- rednaught 15y ago
  Out of a current staff of 73,400. Even wildly assuming that is half of their VP+, I've seen a lot worse ratios.
  - yannickmahe 15y ago
    Quick math: This means that about 975 VP or higher are being laid off. Assuming that you are right about it being half their VP+, it means that one person in 37 is (before layoffs) VP at Cisco. I haven't work in such large firms, but it seems excessive to call VP someone who is in charge of 30 people, no?
    - rednaught 15y ago
      Yes it is excessive. It is also "enterprisey." And finally it is a reason why they are having their lunch eaten by their rivals.
      - lrm242 15y ago
        Not really sure what this means, but Cisco is losing because they lost sight of what they were really good at: core networking and applications that fundamentally rely at on really good core networking (for example, IP telelphony: go ask Nortel and Avaya whether they're eating Cisco's lunch). Internally, Cisco has serious Apple envy. They desperately wanted to be seen as a cutting edge consumer company, to the point of hiring some well known former Apple UX designers. They entered markets where they had no business being (Flip) and starved their core business units (can you believe the guys who build the work group Catalyst switches could almost NEVER hire anyone because of budget) to pay for it.
        sgrossman 15y ago
        This. Off the top of my head, I can think of the following areas where Cisco has fallen off or missed the boat in the last decade: optical transport, MetroE/mobile backhaul, carrier VoIP(BTS and the like, not IP PBX), metro IP routing. I can't really comment on their enterprise products, but I have heard rumblings that their partner programs have been getting worse and worse, leading VARs and re-sellers to seek better margins from HP and the like.
    - roel_v 15y ago
      Doesn't Goldman Sachs have Vice Presidents who have no people reporting to them? Back in the Golden Days I used to read about programmers, who actually programmed all day, who were Vice Presidents. Of course they made several 100k but still, they weren't in charge of anyone. (All of this IIRC)
      - lrm242 15y ago
        A VP at a financial services firm is not a VP at Cisco or really any "non financial services firm". Firms like Goldman hand out Assistant VP and VP to, essentially, 3-5 year tenured employees. Directory and Managing Director are where the rubber really meets the road in these organizations.
- latch 15y ago
  while I agree this probably means Cisco is top-heavy, there's also the possibility that they just throw titles around a lot. The banking industry, for example, does this quite a lot..A large bank might have 5+ CEOs (normally 1-per region)...and, well, things flow down from there...
- tallanvor 15y ago
  I think that's a misprint. The article I read said that Cisco was cutting 15% of positions at the VP level or above - not that the cuts would make up 15% of the layoffs.
georgieporgie 15y ago
6,500 employees ... 15% to come from the vice president level and above ... up to $1.3 billion in severance expenses ... Wow. If I'm not mistaken, that's $195 million split up among an unknown number of VPs (let's say, what, 50 of them?), leaving around $171k per remaining employee. Either those are very, very nice severance packages, or there is some tremendous overhead that I don't understand.
- zxwind 15y ago
  I think 15% means the number of employees to lay off, not the ratio of severance expense.
  - georgieporgie 15y ago
    You're right. Not sure what I was thinking. Anyway, it still sounds like Cisco has ridiculously good severance packages!
- lrm242 15y ago
  Cisco is known to provider 6+ months of severance along with health benefits and other perks to employees that it lays off. If you ever have to pick a company to get canned from, Cisco is a good choice. Anecdote: I know quite a few engineers who were laid off as part of a product reorganization (read: engineering for this product moved to India). At a minimum everyone received 6 months. On the high end, if you were asked to stay and help in the transition, you received 6-9 months plus 1.5x salary during the transition, which lasted approximately 4-6 months if I recall.
pan69 15y ago
What happened on that one day where the graph drops so suddenly?
- paganel 15y ago
  This, apparently: http://money.cnn.com/2011/02/09/technology/cisco/index.htm http://money.cnn.com/2011/02/09/technology/cisco/index.htm . I couldn't find any article from later that day, when the drop happened, but it seems that in spite of "beaten expectations" the investors weren't that happy with the 18% drop in profits. Also, "temporary" URLs are so not cool. I had first tried to link to a Reuters article which I had found via Google Finance and it just wasn't there anymore. at least not where GFinance said it was supposed to be. And we're talking about a web resource published online only ~6 months ago, not about some 1998 article documenting the ongoing dot-com bubble.
Silhouette 15y ago
I bought a bunch of Cisco "Small Office" series equipment recently. Some of the items, particularly the NAS (NSS 300 series), have been very disappointing. More disappointing, though, is that there seems to be no simple way to get meaningful support or contribute feedback afterwards. Half the canonical links on their web site don't even work. They seem to have a whole bunch of forums scattered around the site, but it looks like you can only participate after jumping through all kinds of hoops that we just don't have time for. You can't even download documentation on how essential features work. Obvious example: If we're using encryption on our NAS, how does the key system work and do we need to keep a back-up copy of anything like that in case one of the disks in the RAID array fails? More subtle example: If there is this great integration with Mozy to deal with off-site back-ups automatically, why can't I even find out the prices and do basic due diligence about data security before I sign up for the service, and why did the Mozy call centre staff apparently not even know about the deal and the Mozy sales e-mail address not even reply to a basic enquiry? Is there even anyone at Cisco we can talk to about this? Given that the only other reason to buy the Cisco version of the NAS rather than the original model from QNAP seems to be the Cisco 5-year "support", and the QNAP has had all sorts of enhancements and new functionality rolled out in the intervening period while Cisco have done squat, it's all one-way traffic in our office, and it's away from Cisco. So I'm not surprised they're tightening up. If their other groups are performing as poorly as their Small Business people, I imagine they're suffering a rapid exodus of customers to organisations that understand the meaning of the term "customer service" and realise that professionals working with their kit have a job to do and don't like to waste time.
- roel_v 15y ago
  But aren't those all derivations of the Linksys products? I mean I loved Linksys for home use, but they're hardly in the same class as the 'original' Cisco products and quality (or at least as it was 10 years ago, I don't know how they compare nowadays).
  - Silhouette 15y ago
    No, I don't think so. The Linksys ones are a clear level down, now badged as "Linksys by Cisco" or something similar. The "Small Business" ranges aren't the kind of equipment home users would normally need, but should be plenty for a small office. I'd point you to a link on the Cisco site so you could see the sort of devices for yourself, but as I mentioned, they seem to keep moving them around. :-(

21 points by thematt 15y ago

No longer is it verboten to mention Juniper and HP in the same breath as Cisco when talking about quality networking equipment. Hopefully, Cisco can get back on track and refocus on it's core networking products. Interesting that they are letting go 6500. "6500" is their workhorse networking device but has been in market for about a decade now and needs a serious overhaul to be competitive again compared to Juniper's MX and the Brocade XMR devices.

tom_b 15y ago
I have a neighbor who manages Juniper support engineers. These engineers are typically working onsite at Juniper customers. He has been almost constantly recruiting new support engineers (who seem to either have CCIE certs or a similar experience level) for probably 18 months. Since this recruiting is primarily for new customers, I would guess that Juniper is doing quite well competing against Cisco.

patio11 15y ago

Of the 6,500 employees being cut, Cisco expects 15% to come from the vice president level and above. ...

rednaught 15y ago
Out of a current staff of 73,400. Even wildly assuming that is half of their VP+, I've seen a lot worse ratios.
- yannickmahe 15y ago
  Quick math: This means that about 975 VP or higher are being laid off. Assuming that you are right about it being half their VP+, it means that one person in 37 is (before layoffs) VP at Cisco. I haven't work in such large firms, but it seems excessive to call VP someone who is in charge of 30 people, no?
  - rednaught 15y ago
    Yes it is excessive. It is also "enterprisey." And finally it is a reason why they are having their lunch eaten by their rivals.
    - lrm242 15y ago
      Not really sure what this means, but Cisco is losing because they lost sight of what they were really good at: core networking and applications that fundamentally rely at on really good core networking (for example, IP telelphony: go ask Nortel and Avaya whether they're eating Cisco's lunch). Internally, Cisco has serious Apple envy. They desperately wanted to be seen as a cutting edge consumer company, to the point of hiring some well known former Apple UX designers. They entered markets where they had no business being (Flip) and starved their core business units (can you believe the guys who build the work group Catalyst switches could almost NEVER hire anyone because of budget) to pay for it.
      - sgrossman 15y ago
        This. Off the top of my head, I can think of the following areas where Cisco has fallen off or missed the boat in the last decade: optical transport, MetroE/mobile backhaul, carrier VoIP(BTS and the like, not IP PBX), metro IP routing. I can't really comment on their enterprise products, but I have heard rumblings that their partner programs have been getting worse and worse, leading VARs and re-sellers to seek better margins from HP and the like.
  - roel_v 15y ago
    Doesn't Goldman Sachs have Vice Presidents who have no people reporting to them? Back in the Golden Days I used to read about programmers, who actually programmed all day, who were Vice Presidents. Of course they made several 100k but still, they weren't in charge of anyone. (All of this IIRC)
    - lrm242 15y ago
      A VP at a financial services firm is not a VP at Cisco or really any "non financial services firm". Firms like Goldman hand out Assistant VP and VP to, essentially, 3-5 year tenured employees. Directory and Managing Director are where the rubber really meets the road in these organizations.
latch 15y ago
while I agree this probably means Cisco is top-heavy, there's also the possibility that they just throw titles around a lot. The banking industry, for example, does this quite a lot..A large bank might have 5+ CEOs (normally 1-per region)...and, well, things flow down from there...
tallanvor 15y ago
I think that's a misprint. The article I read said that Cisco was cutting 15% of positions at the VP level or above - not that the cuts would make up 15% of the layoffs.

georgieporgie 15y ago

6,500 employees ... 15% to come from the vice president level and above ... up to $1.3 billion in severance expenses ... Wow. If I'm not mistaken, that's $195 million split up among an unknown number of VPs (let's say, what, 50 of them?), leaving around $171k per remaining employee. Either those are very, very nice severance packages, or there is some tremendous overhead that I don't understand.

zxwind 15y ago
I think 15% means the number of employees to lay off, not the ratio of severance expense.
- georgieporgie 15y ago
  You're right. Not sure what I was thinking. Anyway, it still sounds like Cisco has ridiculously good severance packages!
lrm242 15y ago
Cisco is known to provider 6+ months of severance along with health benefits and other perks to employees that it lays off. If you ever have to pick a company to get canned from, Cisco is a good choice. Anecdote: I know quite a few engineers who were laid off as part of a product reorganization (read: engineering for this product moved to India). At a minimum everyone received 6 months. On the high end, if you were asked to stay and help in the transition, you received 6-9 months plus 1.5x salary during the transition, which lasted approximately 4-6 months if I recall.

pan69 15y ago

What happened on that one day where the graph drops so suddenly?

paganel 15y ago
This, apparently: http://money.cnn.com/2011/02/09/technology/cisco/index.htm http://money.cnn.com/2011/02/09/technology/cisco/index.htm . I couldn't find any article from later that day, when the drop happened, but it seems that in spite of "beaten expectations" the investors weren't that happy with the 18% drop in profits. Also, "temporary" URLs are so not cool. I had first tried to link to a Reuters article which I had found via Google Finance and it just wasn't there anymore. at least not where GFinance said it was supposed to be. And we're talking about a web resource published online only ~6 months ago, not about some 1998 article documenting the ongoing dot-com bubble.

Silhouette 15y ago

I bought a bunch of Cisco "Small Office" series equipment recently. Some of the items, particularly the NAS (NSS 300 series), have been very disappointing. More disappointing, though, is that there seems to be no simple way to get meaningful support or contribute feedback afterwards. Half the canonical links on their web site don't even work. They seem to have a whole bunch of forums scattered around the site, but it looks like you can only participate after jumping through all kinds of hoops that we just don't have time for. You can't even download documentation on how essential features work. Obvious example: If we're using encryption on our NAS, how does the key system work and do we need to keep a back-up copy of anything like that in case one of the disks in the RAID array fails? More subtle example: If there is this great integration with Mozy to deal with off-site back-ups automatically, why can't I even find out the prices and do basic due diligence about data security before I sign up for the service, and why did the Mozy call centre staff apparently not even know about the deal and the Mozy sales e-mail address not even reply to a basic enquiry? Is there even anyone at Cisco we can talk to about this? Given that the only other reason to buy the Cisco version of the NAS rather than the original model from QNAP seems to be the Cisco 5-year "support", and the QNAP has had all sorts of enhancements and new functionality rolled out in the intervening period while Cisco have done squat, it's all one-way traffic in our office, and it's away from Cisco. So I'm not surprised they're tightening up. If their other groups are performing as poorly as their Small Business people, I imagine they're suffering a rapid exodus of customers to organisations that understand the meaning of the term "customer service" and realise that professionals working with their kit have a job to do and don't like to waste time.

roel_v 15y ago
But aren't those all derivations of the Linksys products? I mean I loved Linksys for home use, but they're hardly in the same class as the 'original' Cisco products and quality (or at least as it was 10 years ago, I don't know how they compare nowadays).
- Silhouette 15y ago
  No, I don't think so. The Linksys ones are a clear level down, now badged as "Linksys by Cisco" or something similar. The "Small Business" ranges aren't the kind of equipment home users would normally need, but should be plenty for a small office. I'd point you to a link on the Cisco site so you could see the sort of devices for yourself, but as I mentioned, they seem to keep moving them around. :-(