Cisco’s layoffs this week were likely just the first of many. The company could be cutting a lot more—as many as 5%, reports Jim Duffy at Network World.And that’s the bottom 5%, as ranked by managers, according to Duffy’s sources.
Cisco is engaged in something called the “Accelerated Cisco Transformation” program. It’s lead by Angel L. Mendez, a senior vice president who previously managed Cisco’s supply chain.
Through ACT, Mendez is tasked with tweaking Cisco’s product lines and streamlining employees to “eliminate organisation and functional redundancy,” Duffy reports.
Mendez was given the ACT job about a year ago when Cisco was wrapping up a bigger reorg that included cutting $1 billion in expenses. So ACT is Cisco’s way of fine-tuning the plan.
The Collaboration, Linksys, Advanced Services (which does consulting), and Wide Area Application Services units were hardest hit in this week’s layoffs, sources told BI. But contrary to rumours, Cisco did not dismantle the entire WAAS unit or kill that product.
So, now the expectation is that Cisco will go through several more smaller, targeted rounds of layoffs.
We asked Cisco for comment on the ongoing layoffs, and were pointed to the statement given to us earlier this week. In it, Cisco confirmed that 2% of its workforce had been cut and that the company would “continue to evaluate our organizational structure” and that this week’s cuts “are part of a continuous process of simplifying the company.” (Read the full statement here.)
Interestingly, though, as Duffy points out, Cisco’s total headcount might not change much, as it is about to complete its $5 billion acquisition of pay-TV technology company NDS. This will add about 5,000 people to its payroll.