Cisco Cuts 2 Percent of Workforce as Part of Ongoing Restructuring

Published on July 23, 2012
by Arik Hesseldahl

Networking giant Cisco Systems is cutting nearly 1,300 jobs, or about 2 percent of its headcount, as part of a fluid restructuring plan that CEO John Chambers has said would never quite be complete.

I’ll have some context shortly but I wanted to quickly publish Cisco’s statement on the matter, which I just received from Karen Tillman, head of Cisco’s global corporate communications office.

We routinely review our business to determine where we need to align investment based on growth opportunities. Additionally, we continue to evaluate our organizational structure as part of our plan to drive simplicity, speed of decisions and agility across Cisco.

As we focus on both of these efforts, we are performing a focused set of limited restructurings that will collectively impact approximately 2% of our global employee population. These actions, subject to local legal requirements, including consultation where required, are part of a continuous process of simplifying the company, as well as assessing the economic environment in certain parts of the world.

My understanding is that this cut is just one of those that Cisco has already said will continue to occur as business conditions warrant. Investments in one area will be trimmed in order to make room for investments in other more promising areas.

For background, it was a year ago this month that Cisco said it would cut about 6,500 jobs. The initial result seemed to improve Cisco’s outlook and its subsequent earnings period; the company seemed on the mend. The improvement continued into early 2012, as Cisco appeared to fit once again into its skinny jeans. However, the global economy had other plans that have put a weight on Cisco’s comeback, proving that turnarounds like the one that Chambers has sought to engineer at Cisco don’t come easy.

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