Business

Cisco to slash 6,500 workers; RTP impact unknown

Posted July 18, 2011

Cisco Systems sign

— Networking giant Cisco Systems Inc. is laying off 6,500 employees — about 9 percent of its work force — as it follows up on a plan announced in May to eliminate thousands of jobs in an effort to cut costs and raise profits.

Another 5,000 in Mexico are being transferred to another company.

The company employs more than 4,000 people at its campus in Research Triangle Park. It's the largest concentration of Cisco employees outside the corporate headquarters in Silicon Valley.

The impact on North Carolina operations is not yet known.

Karen Tillman, a spokesperson for Cisco, said in an interview Monday evening that the company would not discuss cuts at specific locations.

"We don't have a breakdown by location or geography," she said.

Asked if that information might be provided in the near future, she replied: "That's possible."

Worldwide, Cisco employs some 73,400 people. That total included the Mexico workers, Tillman said.

Cisco said that the employees it is letting go include 2,100 who chose to take part in an early-retirement program.

The company also has sold a manufacturing firm for set-top boxes in Mexico to Foxconn Technology Group.

While Cisco said there will be no job losses, the 5,000 employees will become Foxconn workers in the near future.

“This figure is in addition to the approximately 6,500 employees impacted by the reduction in workforce and the voluntary early retirement program,” Cisco added.

The company said it will cut 15 percent of its employees at and above the level of vice president.

A portion of Cisco's announcement:

“As part of the company's $1 billion annual operating expense reduction, Cisco will reduce its global workforce across all functions by approximately 6,500 employees, which includes approximately 2,100 employees who elected to participate in a voluntary early retirement program. This also includes a reduction totaling approximately 15 percent of vice president level and above employees. This represents a reduction of approximately 9 percent of Cisco's regular full-time workforce. All affected employees will receive severance pay and outplacement assistance.


“Impacted employees in the United States, Canada and select countries will be notified during the first week of August. The remainder of the global workforce reductions are expected to occur at a later date in compliance with local laws and regulations.”

Cisco said it will take a restructuring charge of $1.3 billion “over several quarters” to cover the costs of the layoffs.

The company will offer severance pay and assistance finding new employment to those laid off.

Cisco will inform employees who have been cut in the U.S., Canada and some other countries during the first week of August.

6 Comments

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  • Squirreling Dervish Jul 18, 7:56 p.m.

    CISCO always dumps it's lowest performing 5% per year....This is news...........why?

  • justcommonsense Jul 18, 7:53 p.m.

    "US Companies can't continue to keep workers here in USA when it it less expensive and more profitable to ship them out."

    While that may be true...for the time being, it will backfire eventually. Interestingly enough many companies who move their companies overseas do so because labor costs are lower. Low enough in fact that those employed in those countries can't afford to buy the very products/services they produce.

    Now, if you lay off enough people in this country..and it's going that way...we can't afford your goods or services either. Add to the picture that as time goes by..and it's not decades....those lower wage employees you have elsewhere start wanting more of the pie as well. It's all a game of musical chairs to keep profits at "projected" margins...even when not losing money to begin with.

  • eoglane Jul 18, 7:52 p.m.

    People it doesn't matter which party is in charge they are going to sell out to other countries. We need to stop worrying about other countries and take care of out own. The us just put 800 million aid on hold to pakistan. Why are we giving that to them when out people need. When we give that to them we borrowed it from some other country. The deficient means we own other countries

  • slappywhite Jul 18, 7:39 p.m.

    YES WE CAN AT WORK !!

  • jscott13 Jul 18, 7:37 p.m.

    They need to fire John Chambers. The problem starts at the top

  • james27613 Jul 18, 7:35 p.m.

    US Companies can't continue to keep workers here in USA
    when it it less expensive and more profitable to ship them out.

    Take a look at the nice facilities that Foxconn has in China.

    http://www.foxconn.com/Condition1.html