Cisco Confirms Rumored Layoffs

From DailyTech: Cisco is working hard to turn things around for investors and bring the company back to the growth and profitability of years past. To facilitate the change, Cisco has shed units that were not part of its core networking operations and has already laid off some workers to cut expenses.

There are more layoffs coming.

Cisco has announced that it will cut 6,500 workers and of that number, 2,100 will take voluntary early-retirement packages. This confirms the rumored layoffs from early this month. Out of the workers losing jobs, 15% are vice president and above employees. The total reduction of workers works out to 9% of the global workers Cisco has. Workers that will be laid off will be contacted the first week of August according to Cisco.

Cisco also says that all affected workers will receive severance pay and outplacement assistance. The workers let go will be in the U.S., Canada, and other select countries and more global workforce reductions will occur at a later date. Cisco estimates that the charges surrounding the layoffs will exceed $1.3 billion and all of the charges are cashed based. However, Cisco expects that $750 million of the charges will be recognize during fiscal 2011 Q4 with about $500 million of the amount relating to the early voluntary retirement program.

Reuters reports that along with the workforce reduction, Cisco has also announced that it is selling its set-top box manufacturing plant in Mexico to the Foxconn Technology Group. The Hon Hai Precision manufacturing part of Foxconn will use the factory. That sale will see another 5,000 workers off the Cisco books. Those workers at the plant will be transferred to Foxconn and no job losses are expected with the sale. The terms of the factory sale were not disclosed.

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