Execs hit hardest as Cisco plans to cut 6,500 jobs
Move part of stated plan to remove $1 billion in expenses
Networking giant Cisco will cut about 6,500 employees from its global workforce, part of a stated plan to remove $1 billion in expenses by the end of its fiscal 2012.
Among the cuts, Cisco said in a statement, will be 15% of its vice president-level and higher positions. The job cuts include about 2,100 employees who participated in Cisco's Voluntary Enhanced Early Retirement Programme. Overall, according to Cisco, the cuts represent 9% of its regular, full-time workforce.
The networking vendor plans to notify impacted employees in US, Canada and select countries during the first week of August, the start of Cisco's fiscal new year. The remaining jobs will be eliminated later in the year in compliance with local laws and regulations. Cisco didn't specify what falls into that remainder.
In addition, about 5,000 people employed at a Cisco facility in Juarez, Mexico, will become employees of Foxconn Technology Group, which is purchasing a Cisco set-top box manufacturing plant located there.
The 6,500 Cisco layoffs were higher than most analyst estimates of Cisco's overall cut, but lower than a report that circulated last week indicating as many as 10,000 Cisco jobs were on the chopping block.
The deadline for participants in Cisco's early retirement programme was 8th July. The company first mentioned a plan to cut $1 billion in expenses during its Q3 earnings call in May, following several successive disappointing earnings reports. At the recently held Cisco Live event in the US, where rumours of Cisco layoffs ran rampant, chairman and chief executive officer John Chambers emphasised that Cisco would look to become a simpler, less bureaucratic organisation.
Cisco also said that it will realise pre-tax restructuring charges of about $1.3 billion over several quarters, comprising severance agreements and other termination benefits paid out. About $750 million of those charges will be recognised during Cisco's fiscal fourth quarter, whose earnings Cisco is scheduled to report next month.