Morning Coffee Jul 12 2011

Cisco Layoffs Could Reach 10,000

By joseph walker

CEO John Chambers is trying to keep the Cisco Systems ship from sinking, and to lighten the load it appears he's willing to dump many of his crew members overboard.

The company could lay off as many as 10,000 employees by the end of this summer, two people familiar with the situation told Bloomberg. About 7,000 employees will be involuntarily eliminated, with the rest of the reductions coming through early-retirement buyouts. The layoffs would reduce the overall staff by about 14%.

Cisco acknowledged "a planned reduction in workforce" in a statement to FINS and said that more details would be coming in an earnings call on August 10.

Cisco said that it would be reducing its headcount when it announced the euthanizing of its Flip camera division, but the size of the cuts being reported this morning is larger than most expected. The San Jose, Calif.-based networking company has been trying to reorient itself toward success after a string of ill-advised acquisitions and amid mounting competition from rivals like Hewlett-Packard and Juniper Networks.

Cisco is a classic start-up success story, growing from a mom-and-pop operation into an $85 billion company. But analysts say that the company has simply grown too large and that it can't sustain its 70,000-plus workforce.

One commentator, though, argues that the layoffs could lead to an even faster downward spiral for the company. Cisco's problem is a lack of innovation, Seeking Alpha writes, and how can it innovate more with less employees? Not to mention the impact the jobs cuts will have on employee morale, perhaps prompting remaining workers to switch companies before the next round of pink slips.



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List of the Day: Horrible Boss Tips

There are things you can do to make working with a bad boss a little more tolerable.

1. Try to limit your interactions so you spend less time with them.

2. Speak up for yourself; it may help you gain respect.

3. Look on the bright side: You're learning what not to do when you're the boss.

(Source: Glassdoor)

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