Cisco Lays Off 1,300 Employees to Compensate for Low Quarterly Revenue

July 24, 2012
By: Rory Lidstone

Bad news from Cisco (News - Alert) yesterday.

The company has lain off 2 percent of its staff, amounting to about 1,300 employees of the 65,000 workers on the company's payroll. According to a source close to the company, a large chunk of those employees – about 400 – were from its Collaboration business unit, namely sales people in its WebEx unit.

Another anonymous source stated that Cisco cut its entire sales team for its Wide Area Application Services (WAAS) product, meant to help networks process data faster. Officially, however, there is no word as to which sections of Cisco received the layoffs.

Cisco did say that this is just part of an effort to "simplify its operations" while adjusting to changing economic conditions globally. It pulled a similar move last year, shedding about 10,000 jobs as part of a program to save $1 billion annually.

"We routinely review our business to determine where we need to align investment based on growth opportunities," the company said in a statement. "Additionally, we continue to evaluate our organizational structure as part of our plan to drive simplicity, speed of decisions and agility across Cisco."

This most recent move to save money was apparently influenced by lower-than-expected revenue for this most recent quarter – well below Wall Street expectations.

Earlier in the year, Cisco dropped its tablet, the Cius, after realizing that it just could not topple Apple's (News - Alert) iPad in that market.

"Cisco will no longer invest in the Cisco Cius tablet form factor, and no further enhancements will be made to the current Cius endpoint beyond what’s available today," said Cisco officials. "Moving forward, we intend to double down on software offerings, like Jabber and WebEx, that provide the anytime, anywhere, and any device experiences. We will leverage key learnings and key collaboration experiences native to Cius in our other collaboration products."


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Edited by Braden Becker