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Spin This: Cisco To Fire 10,000
A year after the outgoing secretary of the treasury top ticked the economy and ushered in QE 2 with his abysmal NYT op-ed "Welcome to the Recovery" it is only appropriate that we get news that Cisco is preparing to fire 10,000, or 14% of its entire workforce, over and above the number of people that the company said was going to be let go in May. "The cuts include as many as 7,000 jobs that would be eliminated by the end of August, said the people, who asked not to be identified because the plans aren’t final. Cisco, based in San Jose, California, is also providing early-retirement packages to about 3,000 workers who took buyouts, the people said. Cisco Chief Executive Officer John Chambers is slashing jobs and exiting less-profitable businesses as competitors such as Juniper Networks Inc. (JNPR) and Hewlett-Packard Co. (HPQ) take market share in Cisco’s main businesses with lower-priced, simpler products. Sales of Cisco’s switches and routers, which made up more than half of revenue last year, will continue to slip, said Brian Marshall, an analyst at Gleacher & Co." All in the name of the bottom line: "Eliminating jobs will help Cisco wring $1 billion in expenses in fiscal 2012, the company said in May. Cisco expects costs of $500 million to $1.1 billion in the fiscal fourth quarter as a result of the voluntary early retirement program, it said in a quarterly filing."
More on Cisco:
“We will provide additional detail on the cost reductions, including layoffs, on our next earnings call,” Karen Tillman, a spokeswoman for Cisco, said in reference to an earnings call scheduled for early August. She declined to discuss job cut figures.
The voluntary retirement packages included one year’s pay and medical benefits, and were offered to about 5,800 employees, two people said.
“The revenue trajectory hasn’t been where it should be,” Marshall, who has a “neutral” rating on the stock with a target price of $17, said in an interview. “The company is not staffed on an appropriate level. They simply have too many employees.”
Cisco said in May that it shuttered the Flip video-camera unit and cut 550 jobs. The company may eliminate more positions in the consumer-product unit, which makes Linksys home- networking equipment, Marshall said. Some investors have said the company should exit consumer products entirely to focus on traditional enterprise offerings such as routers and switches. Cisco’s equipment is used by corporate networks and telephone and Internet service providers to direct Web traffic.
Trimming about 5,000 jobs would reduce operating expenses by about $1 billion annually and boost 2012 earnings by about 8 percent, Marshall said.
We expect many other companies to follow
suit in order to eliminate even more "overhead", or as it is better
known, fat. And while S&P500 EPS may get a modest boost out of this
latest upcoming firing wave, it means that the next leg down in payrolls
is imminent.
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paging LaVorgna ...paging...
In unrelated news, 10k new applications submitted to graduate schools, hence another price increase in tuition! Woo-hoo, GDP increase!
Or applications to McDonalds.
Grad schools will have more slots to fill.
Cisco is full of fat and needs some cuts. I work with them a lot and I guarantee that in most interactions 30% of the people there these days are useless idiots. After they get past this cut it will end up being good for them, provided they actually make the right cuts...
LOL Right cuts.... makes me think about these economists that can't shoot straight.
As a rule of thumb, in any large organization, 30% of the people are idiots...
You can make that 70% without a sweat
the problem is that the 30% cut are the good people and the shite keep teir jobs.....
Good point! Whenever vast layoffs happen, the layed off are told to go to school and improve their skills! So Grad Schools will surely pick a few thousand former CISCO workers looking to upgrade their skills for jobs that probably won't exist.
Or they can downgrade their skills from "network engineer" to "Chinese router assembly line worker" and take their place on the line for pennies an hour.
Give this man a cookie for he knows of what he speaks.
This is what I call change you can believe in bitches. I love asking people in traffic with Obama stickers how that change is working out for them. Most look at me with a quizzical look on their face like they have no idea wtf I am talking about. Bahh bahhhh....
I usually just pop them the sailor's farewell when I blow by...
The economics of grad school is more subtle than that. Very few post masters candidates write checks and I can assure you that Universities are not going to scrape together more tuition and stipend packages. Expansion of graduate programs is not necessarily profitable (except MBA, LAW, and M-Eng.) The physical sciences surely will not expand.
10K laid off to be replaced by bobble head H1B visa holders.
yes so they can still have 8 of them on a conference call and the other 2 local engineers doing all the planning and work... but hey, they don't mind writing up 5 forms of status updates and chart results of incomplete bullcaca
...with all profits therefrom to support executive bonuses
Hey! Hey now! Been to India FT? Hmmmmm?
That outsourcing thing is a curse. I know it first hand. LAbour cost arbitrage across national boundaries. That's workign well in the EU too eh?
But India? I'd say it's been just plain BAD for us.
Take those numb/dumb/crumb jobs back.
But your crack-loving bankers love the arb to much as well as the middle-class being made here now, soon to be sheared too.
Big picture FoodT, big picture. Don't be a hater.
ORI
http://aadivaahan.wordpress.com/2011/03/01/on-outsourcing-and-its-ills/
paging HarryWanger is more like it! Where is that idiot, i have seen him around the site for ages? Wasnt he recomending everyone buy CSCO "for your kids" this time last year after their profit downgrade? He should be charged with child abuse.
+1 Child abuse. That's some funny stuf right there.
Hamy has joined the ranks of rats leaving Obummas sinking ship... he was a paid shill of Obummas internet campaign but even he saw the light and couldn't push water uphill any longer
..so another winner (10,000 job losses) for Jobs Czar, Jeff Immelt. his expertise for the post presumably comes from sacking 34,000 of his own staff at GE ...wonder if he's considering his position too or will continue looking another usless Obumma jack-ass?
So Chambers should be appointed to the blue ribbon panel set up by Immelt on jobs. He is now more than qualified. The real crime is that Chambers hasn't lost his job - stock has done nothing but he has managed to rape the company with his options pay package.
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Michael -- you're talking to a twenty-line Perl script.
Maybe they can work for McDonald's? I hear they're hiring...
that's what their website says, but I never got a call back..
I have noticed a literal shit ton of white people working at my morning coffee McDonald's in the past year. For the 8 years prior to that the morning crew was almost entirely Hispanic but lately it's about half and half. Times must really be tough for some folks.
Spun:
That's 10,000 people that won't be laid off again.
No need to spin. Just re-use the old script: Bush's fault!!
We can use Nancy Pelosi's crib notes.
Seeing as unemployment benefits are the best way to stimulate the economy, we have 10,000 more reasons to be optimistic about this recovery.
"Unemployment benefits are creating jobs faster than practically any other program, House Speaker Nancy Pelosi claimed Thursday."
http://michellemalkin.com/2010/07/01/pelosi-unemployment-checks-best-way-to-create-jobs/
And they can't figure out why the economy is suffering like it had chronic obstructive pulmonary disease.
Damm, I like it...Next time anyone asks me where I work I am going to tell them I work for Nancy Pelosi...!
That's another 10,000 on food stamps; and watching day time TV. More bread and circus for the sheeple.
Spin v2.0: It will be weather related in next month's NFP number
Who else remembers Chambers' interview on 60 Minutes wanting a 'tax holiday' to repatriate all that money so Cisco could create jobs?
If you don't remember it, here it is: http://www.cbsnews.com/video/watch/?id=7360936n
Did JC-superstar just play chicken with the government? Looks like only losers in that game are the 10,000 employees in San Jose.
How would a tax holiday have saved those jobs? They were laid off due to competition from Juniper and HP
Does this make my CCNA less valuable?
Cisco is located in the Republik Of Kalifornia? That is a HUGE mistake.
And now the tech jobs start to move overseas. But keep blaming taxes instead of the ready availability of global cheap/slave labor due to "free trade" policies that were supposed to help the U.S. middle class.
hey, the easy way to take over a country.. just give them free food and rent and netflix and they'll never know that the 'outside' doesn't even use English anymore...eventually just chop them all up and make a new section in the Chinese buffet called 'american',,, right next to the sweet & sour alley cat
Your comment somehow reminds me of that Jim Carey movie, The Truman Show.
ORI
So are Juniper and HP - their main competitors. Juniper is just a few miles away from Cisco.
Exactly! If they would simply have annouced that they were moving to Wyoming, half the people would have quit and they would have saved a ton on severance pay!
Is this the reason why ES plunged?
No, that was me. I'll give you a heads up next time.
Work for W&R?
That's 10,000 people given the opportunity to re-optimize their job skills...elsewhere.
Hell ya. Those 50 year old Electrical Engineers will make great contributions as laborers rebuilding the nations infrastructure for government contractors using stimulus funds printed from nothing.
Should be plenty of new positions for network experts in Obama's new Cyber Secretariat.
double post. sorry
That's more'n half of last month's job creation.
Crikey.
Hey! Maybe one of 'em can fill Geithner's chair.
Better idea: 10,000 Treasury Secretaries are better than 1 plus they'll get .gov beni's!
Less than expected ;-)
Well done, nmewn.
Well at least somebody got it ;-)
^ WIN!
good one
(...although judging from the URL on Bloomberg's site, 10k is double what was expected.)
Let the Layoff Olympics begin...
Instead of a torch, they will carry the Golden Pitchfork
This is a dumbass company. No innovation anymore. It's glory days are over.
Agreed. They were on their way out anyway. Their products are clunky and way overpriced (except on Ebay). Any innovation Cisco exhibited in the 1990s came from gobbling up smaller companies. Switches and routers -ho hum- the plumbing hardware of the 21st Century.
Unfortunate for those layed off that the firings come in the midst of s 'soft patch'.
A company this size would have to get 'permission' to do this. Once the flood gates open, expect a lot more companies to follow suit (as referenced in the article).
10,000 more families that won't be paying mortgages, but won't get evicted either. Therefore, they can buy more I-things and nick-nacks with those generous unemployment checks.
Fun-employment!
Long term funemployment and O-Care means every day is a day at the beach.
Only fools work in Socialist America.
Judge Judy gets a ratings boost of 10k!
Its like a fucking nightmare.
Truly now, if someone were actually trying to wreck everything they touched, what would they do different?
Almost like there was a plan.
Cloward-Piven.
That's a tough question. It's like when you're having a bad streak trading, you start thinking, "What if I just did the opposite of every trade I was about to enter?"
But then you think, "Well, but what if they think that I think that I'm going to take to opposite side of the trade?", and so on.
I think they're wrecking everything via a sort of Zen Fuck-up Master state that they've achieved after never having done anything worth a shit in their entire lives. I mean, other than writing some dumbass papers in school and such.
What's killing Cisco (aside from weak demand in the US) is competition from China, notably Huawei modems, a brand owned by ZTE (Shenzhen 000063). What Cisco refers to as "Internet Protocol-based networking solutions" are mostly stupid modems and trust me, they are easy and cheap to manufacture. Just like the US economy, Cisco is a product of the dot-com bubble that has refused take the full extent of the hit in 2000.
To understand your work with Cisco, you only need two things.
OSI Model (Which was hammered into my brain only to be cobblestoned over with something else much more useful)
Router Commands which generally consist of one or two words followed by two or three lines and numbers grouped in IP's and Subnets.
TThat is it. Everything else is just theory.
Anyone anywhere can go to Cisco Router simulators which will open and operate in virtual mode on your computer and once you have the hang of it... *Shrugs.
The next step will be for Cisco to ship the jobs overseas to a Sweatshop of sorts or a bunch of school children to do the assigned work.
It's a little harder than that if you are delivering a valuable solution to many customers on a complicated high-speed network. ;)
Or not, as it turns out, which is why Cisco's competition have been eating their lunch for several years now. Overpriced bloated and overly complicated is what they have been hawking, thus becoming the IBM of the router world.
Cisco routers are great because they can do so much, and they do it reliably. But only 20% of their customers need the advanced features only Cisco does so well at. The rest do just fine with the more basic features Cisco's competitors offer.
I do believe Cisco has moved too much focus off of their core competencies and that has affected their innovation on their router lines. Flip was a really dumb move...
We are in complete agreement.
Interesting! Somehow I figured a China based competitor would be part of this story.
This sort of manufacturing is right in line with China's strong points, perhaps 10K is only a warm up before industry wide layoffs of USA based workers.
Ypu gotta ask, with the costs of a USA based employee, how on earth will any manufacturing and developement hang around the USA.
I wonder how many high paid workers in Silicone Valley thought a few years they were immune from the ravages of "free trade" on the U.S. economy.
What a bunch of dumbfucks they are to be involved in making actual shit. Why, 30 miles up the road at Zynga they could be making imaginary cow, tractors and shit with zero supply chain required--save for a few stray electrons. Now THAT'S a business model! Sell people imaginary crap and charge them for it. Motherfuckers are making, what, $800 million per year doing this? This business model makes the Pet Rock look like a complex idea. I figure what's next is that BofA and Zynga merge and they just take .00001 on every financial transaction and provide fuck all but a new debit line on your bank statement every month. No need to provide anything of any value any more. American consumers are so fucking stupid that they'll pay for anything...or nothing.
+10..I'll never forget the first time someone showed me that...I walked around shaking my head for two days.
I like your style, PD. I was reading your post thinking, that sounds exactly like something I might write. This guy must be cool.
That last line, pure genius.
What you dont like Mafia wars????? you must be a soft terrorist!
by Jack Burton on Mon, 07/11/2011 - 22:03 #1446323
Interesting! Somehow I figured a China based competitor would be part of this story.
- - - - - - - - - - - - - - - - - - - - - - - - - - -
Day late and dollar short; Foxconn - http://www.foxconn.com/ IS Cisco's China based contract manufacturer ... collar any Mfg eng at Cisco and he/she'll tell you (Been there - seen it) ...
.
ZTE is ZTE, Huawei is Huawei. Separate entities.
We better open up a few more McDonald's franchises.
Wonder how many software/hardware engineers might wind up going all pirate-like (lulz style).
never good.......never
Cisco Kid was a friend of mine, but not if he's unemployed he's not! bum!
software programmer to obama: soooo im going to be competing against 10000 addtl people for a job? I thought there was a recovery?
obama: everyone's gotta make sacrifices
I left Cisco out of College when I imagined a future surrounded by Ho-Ho snack wrappers, bad teeth and a unfulfilling life entering words and numbers over and over again to a machine somewhere in the Globe on a WAN, LAN or whatever that I will never see or touch. Blah.
The fucking ethernet was even more simple. Computer to this box, this box to a bigger box and thence to the mighty router. Then to something else and so on.
Syn Ack Fin!
Some are born to network, some are not.
Was that the starting bell for the corporate hacks to start firing more people. Me thinks o.
10,000 more jobs to China! only 40,000 more to make our Monthly quota!
I hope Cisco does GREAT! things with the Tax Break(s)!
EUR/USD just ATE SHIT
http://video.google.com/videoplay?docid=-5742933797940084418
@ 34 seconds
This to me is more ominous than what's coming out of Europe right now.
CSCO and the rest are just down I-680 a piece. As someone indicated above, for CSCO to announce this size of layoff smacks of "Apres Moi, Le Deluge".
He drinks whiskey, Pancho drinks the wine...
http://www.youtube.com/watch?v=GMlrI6IkQv0
+1 for memories.
Better to spin records than jobs numbers, eh?
Yes my alumnus sister, it certainly is.
The outlaws had us pinned down at the fort...
Obama's presidency is a dead issue. Those hoping for a republican to bring the jobs home are an even deader issue than Obama's presidency. Polical parties are so 20th century, the oligarcy owns them both and will buy up any upstart [read tea party] as fast as they gain a voter base.
Under President McCain not one more job would have stayed in the USA. Not one stinking job.
by Jack Burton on Mon, 07/11/2011 - 22:07 #1446339
Obama's presidency is a dead issue. Those hoping for a republican to bring the jobs home are an even deader issue than Obama's presidency.
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Brain-less or Brain-dead?
Pol party's AREN'T going away anytime soon either ...
.
LOL...I have just seen your idiot TOTUS speak in Wisconsin...what a fucktard he is. An awesome campaign he ran in whenever it was, but he is SO fucking dumb. Pity...
Not to generalize, but I am amazed at the number of people that I come into contact with that recently express a sense of relief when they get their pink slip. I hear "i think i'm going to go back to school" or "at least now i can spend some time with my family." They are almost glad to have a subsidized vacation. Maybe it is just because it is summertime in the northeast and people are looking forward to some rest. Or perhaps these expressions about the silver lining of unemployment are a coping mechanism. Either way it is a disturbing thought that losing your job has lost it's stigma. Oh well, gotta get back to work to help subsidize my neighbors vacation!
The Sigma lies being rejected by your family for advocating your 1,2 and on down through the Consitutional Amendments.
You are further rejected when you tell your family FDIC is bust and ignored when you try to teach them to pay off that mortgage now (As in years ago) and get the note.
You are finally reduced to a life of a outcase on ZH scraping together what little sanity you have to follow the converstations of other rejected people who have generally solved the world's problems overnight by blog.
Yes, that's usually just a mind game they play with themselves. The pain and anxiety are temporarily over. It'll never lose its stigma with me.
Ask them how they feel in 6-9 months.
This seems to be a common play:
1)Piss away a gob of money on bad investments, reducing your capital strength (should I list the brain dead acquisitions or just stop with the $7billion for Cerent and $2b for Andiamo (which they already owned since it was a spin-in?) Flip?
this sounds like the 2008 bailout
2) When none of the investment works, just punish your people (Cisco lays em off, Uncle Sugar and the locals raise taxes or reduce services).
I won't hold my Breath for Chambers to offer severances to the newly laid off out of the $100's of millions he has extracted in options for a stock that has sucked in every sense for a decade.....
Vengeance will be the Lords. His Initials are JC! Ha!!
by realitybiter on Mon, 07/11/2011 - 22:21 #1446374
This seems to be a common play:
1)Piss away a gob of money on bad investments, reducing your capital strength (should I list the brain dead acquisitions or just stop with the $7billion for Cerent and $2b for Andiamo (which they already owned since it was a spin-in?) Flip?
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
300 Mil for Navini (Wireless Infrastructure "WiMAX") ~ 2008; a couple years later new product nearly complete was CANCELLED ("P4") internally and never saw the light of day 300 mil plus two years development (salaries, board builds, software etc) down the drain ...
.
But that's ok right? We have a web 2.0 renaissance going on in silicon belly and Wall Street IPOs lined up to the sky, kids are quiting school to start companies valued at billion dollars funded by the John Doles and Vinod Khosmas that will create 1 million jobs a month non? If even all these fail to create the jobs needed for re-election, we can always fall back on QE3 to print and air-drop toilet papers at the solars, teslas, and ethanols and have congress regulate that each recipient of the FRNs must hire 50k bigmac gulpers a month to boost the NFP right?
I am hoping at least one disgrungled laid off worker must still be hiding within the floors of the Headquarter's Server farm carefully timing the moment to snip some very important cables.
"according to sources, all laid off employees will receive a complimentary Ipad, and a coupon for free hamburgers a local McDonalds."
"...with purchase of one Ipad and two hamburgers at regular suggested retail price."
CW
another green shoot hits the toro blade....
I cut fields, not grass.
The stupid commericals show one inch manicured lawns being cut effortlessly by new mowers.
They should inject the sound of a opposing piston tractor bogging down on some paper trash blown into the PTO.
OK...board members are granted extra, extra stock options, which they will sell like madmen, to be followed by the announcement of an increase in the corporate stock buy back, further giving the appearance of earnings growth where there is none.
And suicide proof windows are installed as we speak.
The next boardroom will be built in the sub basement equippted with staplers. The red ones.
Not sure the Silicon Valley has enough McDonald's chains to absorb this.
Yes, but some of the cabernet drinkers can shift to picking grapes. (you know, to stay "current")
If they build they will come. I see a lot of IT increase at MCD. about time MCD had robots cooking and taking orders.
How about coffee shops?
Why care about "jobs" when we can all make money shorting the PIIGS ?
Less than next week's upward revision of initial jobless claims.
8-D
How many of those clamoring for austerity will sing a different tune when they join the swollen ranks of the unemployed? And if cutting the deficit is really your first priority, then how do you argue that protecting millionaire earners achieves your target? Of course, democracy comes before hypocrisy...in the dictionary.
Geez, Stalin.
The problem with stealing the wealth of the rich is you can only do it once, and then there is no one but bureaucrats to invest in start ups.
They have a really bad track record of pissing away billions to produce absolutely nothing, but votes.
"And if cutting the deficit is really your first priority, then how do you argue that protecting millionaire earners achieves your target?"
Simple.
Your first target was those making 200-250K which didn't work out so well as a strategy.
So, its not really about "the millionaires", is it?
yeh nevermind, but after the night comes the morning. nobody said there was not going to be a lot of pain in all of this. listen. if those bastards sell us out and i know they will, it is finished in this country.
So you think we can continue to run $1.7 trillion deficits forever and it won't matter? Repeal the Bush tax cuts and we still have a $1.6 trillion deficit annually. Steal every last dime from the Forbes 400 and we still have an $1 trillion deficit this year and $1.6 trillion again annually. There is no way to tax ourselves out of this mess. Spending went from $2.1 trillion under Clinton to $3.9 trillion under Obama in 10 years. The Bush tax cuts "cost" the government $140 billion annually. The last time they taxed the rich, over 40000 middle class "luxury" boat builders lost their jobs. That worked out real well.
Hmmm...who's going to get canned....the few remaining Americans getting livable wages OR the slave wage H1-Bs.....
It's amazing what has happened to this place. I am starting to wonder when we'll openly exercise the caste system in the valley. Makes we wonder which one the Americans will get slottd into...
The remaining Americans.
The H1-B's are strongly encourage to work harder and succeed.
Until the Americans learn to live cheaper than the H1-B does this will continue.
as an american, i find it so insulting for them to bring foreigners here so they can employ them at a cheaper rate than an american. what they want is for everyone to work for 5.00/hour..........with no benefits........
and here i am paying my staff $5 per day yer fat ass yank bitchez.
That's right asswipe...all aboard the Global Wage Arbitrage train, departing to 3rd world status. I just hope they don't wait too long to get to your industry. And please kind sir, do tell what shining city upon a hill where you reside
Hmm....now that I think of it, Silly Valley is ahead of the curve then. It already is starting to look like a 3rd world shithole.
u know, as a corporation, u r on your mother fucking toes if u decide u have to fire 10,000 of your employees all at the same time
Nah.
Have HR process them out and each one escorted off property by Security, when all are gone then announce it.
What they do not understand that even the most abused worker will harbor great patience as they evaluate the Mansion on the hillside in the distance as Cisco parties away the night.
that is what they used to do at compaq. they would fire some guy and then the goon squad would come in and escort him off the property, maybe ten minutes max............ha ha ha
In unrelated news, Xinjiang Yuansheng Technology Development, Ltd. annouces an increase of 40,000 production positions.
the people that invented cisco type routers and switches, in their garage, should never have sold the company, to the venture capitalist. what a great invention it was and now look at them driving it into the ground.
I wonder if Chambers is doing this to save his skin.
If anyone deserves to have his head chopped off it's him. Why the shareholders haven't kicked his ass to the curb by now is beyond me. Should have happened years ago.
how did that flip camera acquisition work out. someone has lost their way. what is cisco about anyway? routers. always was and always will be. they were the best. and now look at them. greedy fucks.....
+10.0.0.0
Sometimes, when we are lucky, right after the n-1 pink slip is handed out, the CEO is handed the nth one.
Comcast is doing the same thing; massive outsourcing effort is underway for their internal technical people. They're keeping it under wraps, but a huge chunk of their support staff is expected to get the axe. Good thing they bought NBC, they can use that to spin this as a positive!
why use americans when you can get some indian guy to do it for a lot less.
but atleast they might do a better job ? google science fair results out !
They are going to hire them all back in two months to get the tax credit.
May just get to try the spaghetti MRE sooner than I thought. Oh trusty Mossberg, though shall not sit idle much longer.
But hey everybody, free bread is coming...and tickets to the Circus!
+590
How about having some real spaghetti and meatballs while you can still get spaghetti.
When you can longer get the raw materials to make your own pasta - the world is finished.