Cisco to lay off approx. 550 employees
Cisco (NASDAQ:CSCO) announced that it plans to layoff approximately 550 employees in the fourth quarter of fiscal 2011, as part of the company’s comprehensive plan to align its operations. It stated that it will exit aspects of its consumer businesses and realign the remaining consumer business to support four of its five key company priorities – core routing, switching and services; collaboration; architectures; and video.
“We are making key, targeted moves as we align operations in support of our network-centric platform strategy,” remarked John Chambers, chairman and CEO, Cisco. “As we move forward, our consumer efforts will focus on how we help our enterprise and service provider customers optimize and expand their offerings for consumers, and help ensure the network’s ability to deliver on those offerings,” he added further.
As part of its plan, the company will close down its Flip business and support current FlipShare customers and partners with a transition plan. In addition, it will refocus its home networking business for greater profitability and connection to the company’s core networking infrastructure as the network expands into a video platform in the home. Besides, the company will integrate umi into the company’s Business TelePresence product line and operate through an enterprise and service provider go-to-market model, consistent with existing business TelePresence efforts; and also assess core video technology integration of Cisco’s Eos media solutions business or other market opportunities for this business.
In connection with the changes to the consumer business, it is anticipated that Cisco will recognize restructuring charges to its GAAP financial results, with an aggregate pre-tax impact not expected to exceed $300 million during the third and fourth quarters of fiscal 2011. The charges will be disclosed in upcoming earnings conference calls and quarterly Form 10-Q filings.
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