The Network Hub

Jul 18 2011   4:48PM GMT

Cisco confirms layoffs, sells set-top box factory

Shamus McGillicuddy Shamus McGillicuddy Profile: Shamus McGillicuddy

The axe finally fell late this afternoon. The long-rumored layoffs are official at Cisco.

Just days after the conclusion of Cisco Live, the company’s annual customer conference where William Shatner delivered a keynote and Grammy-winning band Train played a private show for attendees, Cisco Systems confirmed today that it will cut 6,500 jobs from its global operation. An early retirement program will account for 2,100 of the lost jobs. The rest are layoffs, apparently. This represents a 9% reduction in Cisco’s full-time workforce.

Cisco noted that “15% of vice president level and above” employees will get the axe in this move, signaling that Cisco trying to streamline its management structure (and perhaps cut some of its higher paid employees by targeting executive suites).

Cisco also removed an additional 5,000 jobs from its payroll by selling an old Scientific Atlanta cable set-top box factory based in Mexico to Foxconn Technology Group. This move amounts to Cisco outsourcing the manufacturing of set-top boxes to a third-party in order to reduce costs.

These moves are part of Cisco’s “Comprehensive Action Plan” for simplifying the company, improving corporate focus on core businesses and reducing annual operating expenses. As part of that plan, CEO John Chambers laid out a goal earlier this year to reduce expenses by $1 billion.  I presume that hiring Shatner and Train to appear at Cisco Live last week was just a drop in that billion-dollar bucket. Still, as you were swaying to the sweet, sweet melody of “Hey Soul Sister” did you think about how that Grammy-worthy performance was probably costing someone a job?

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