Cisco to Cut 1300 Jobs

by Dan Holden | July 23, 2012

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Cisco Systems announced today that it will cut about 2 percent of its global workforce, or 1,300 jobs, in continuing efforts to bring down costs.

The cuts are part of CEO John Chambers’ effort to maintain leadership in the global networking space, where it is facing tough competition from the likes of Juniper Networks and, in the Far East, from Chinese Internet giant Huawei Technologies and others.

“We are performing a focused set of limited restructurings that will collectively impact approximately 2 percent of our global employee population,” the company said in a statement, adding that the cuts “are part of a continuous process of simplifying the company, as well as assessing the economic environment in certain parts of the world.”

The new round of layoffs comes almost exactly a year after the company cut 6,000 employees, or 15 percent of its workforce, as part of a strategy to cut $1 billion in costs.

Critics have said for some time that Cisco lacks the flexibility to adapt to a fast-changing environment, even though it’s often credited with being among the first in the industry to identify new developments, including the emerging cloud computing era, the rapid increase in bandwidth due to movie and game downloads, and the even faster rise of enterprise networks and high-density consumer networks in Asia. Analysts said the company has been slower to respond to competitive threats to its core enterprise network business from companies adept at handling security threats.

As a result, Chambers recently forewarned analysts, who were anticipating 7 percent growth for the company’s fourth quarter (which ends August 15), that Cisco may in fact only realize 3 to 5 percent growth in the quarter.

Cisco had 65,223 employees at the end of its fiscal third quarter, according to its website.

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