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Cisco's cost cutting slashes 6,500 jobs

Posted: 20 Jul 2011 ?? ?Print Version ?Bookmark and Share

Keywords:cost cutting? job cuts? layoffs?

As part of its plans to reduce operating expenses by around $1 billion per year, Cisco Systems Inc. has revealed that it will cut around 9 percent of its global workforce.

The company is cutting 6,500 of its regular full-time employees, including around 2,100 employees who agreed to a voluntary early retirement program. Cisco also noted that roughly 15 percent of the layoffs will be vice presidents and higher ranking executives.

According to Cisco, all affected employees will receive severance pay and outplacement assistance. The company expects to recognize total pre-tax restructuring charges to its financial results of no more than $1.3 billion over several quarters for severance and other one-time termination benefits.

Layoffs around the world
Other companies are also cutting their workforce. Acer recently cut 300 of its employees due to poor sales. Read the article here.
Panasonic has also announced that it will shave off 17,000 of its workforce over the next two years. More about Panasonics' layoff and restructuring program here.

Aside from the layoffs, Cisco also announced that Foxconn International Holdings Ltd has agreed to acquire its set-top box manufacturing facility in Juarez, Mexico. Although the financial terms of the agreement were not disclosed, Cisco disclosed that about 5,000 employees at the site will be absorbed by Foxconn in the first quarter of 2012. These 5,000 employees transferred to Foxconn are not included in the 6,500 job cuts.

Cisco assumed ownership of the Juarez plant when it bought Scientific Atlanta in 2006. The facility manufactures video and telecommunications equipment for the service provider market.

"After working closely with Foxconn for many years, we know they are a strong strategic fit with Cisco's long-term goals and are committed to a successful future in North America," said Gary Moore, Cisco's executive vice president and chief operating officer.

"We remain fully committed to our service provider customers and partners, and will continue investing in existing and new video platforms, including set-top-boxes, as part of our Videoscape vision," he added.

Analysts have been expecting Cisco to cut jobs since the company turned in disappointing quarterly numbers in May. According to the Wall Street Journal, analysts had pegged the number of layoffs at between 5000 and 10,000.

Dylan McGrath
??EE Times

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