In what is probably the year's least surprising downsizing event, Cisco Systems (NASDAQ:CSCO, news, filings) has detailed the headcount reductions they will make as the company tries to find its way back to the future by finding $1B in annual savings. They will reduce their global workforce by 6,500, of whom approximately 2,100 will come via voluntary early retirement. All employees will get severance of some sort, as well as 'outplacement assistance'.
It's not just the rank and file taking the hit, as there will be a 15% reduction at the VP-and-above level. That's a higher rate than the 9% represented by the overall 6,500 - from which we can infer the obvious, that Cisco was top heavy. Too many managers, not enough people actually creating stuff. Cisco is not the first and certainly won't be the last to have caught this particular virus.
Along with layoffs of course come non-recurring restructuring charges, which in this case will exceed $1.3B over several quarters. $750M of that will be recognized in Cisco's fiscal Q4, with the rest following in fiscal 2012.
The pink slips, err, notifications go out in the first week of August. So for those Cisco folks reading this, keep your heads down and your resumes up to date - and hopefully those affected will quickly land on their feet. It's a tough job market out there now though for most. In the meantime, humor is the best way to keep perspective:
Ok, maybe that didn't help... 🙂
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