Cisco To Cut 6,500 Jobs, Execs Hit Hardest
Among the cuts, Cisco said Monday, will be 15 percent of its vice president-level and higher positions. The job cuts include about 2,100 employees who participated in Cisco's Voluntary Enhanced Early Retirement Program. Overall, according to Cisco, the cuts represent 9 percent of its regular, full-time workforce.
Cisco plans to notify impacted employees in the U.S., Canada and other countries during the first week of August, the start of Cisco's fiscal new year. The remaining jobs will be eliminated later in the year, Cisco said, though it didn't specify what falls into that remainder.
In addition, about 5,000 people employed at a Cisco facility in Juarez, Mexico, will become employees of Foxconn Technology Group, which is purchasing a Cisco set-top box manufacturing plant located there.
The 6,500 Cisco layoffs were higher than most analyst estimates of Cisco's overall cut, but lower than a report that circulated last week indicating as many as 10,000 Cisco jobs were on the chopping block.
July 8 was the last day for participants in Cisco's early retirement program. The company first mentioned a plan to cut $1 billion in expenses during its third quarter earnings call in May, following several successive disappointing earnings reports. At the recent Cisco Live event in Las Vegas, where rumors of Cisco layoffs ran rampant, Chairman and CEO John Chambers reiterated that Cisco would look to become a simpler, less bureaucratic organization.
Cisco also said Monday that it will realize pre-tax restructuring charges of about $1.3 billion over several quarters, comprising severance agreements and other termination benefits paid out. About $750 million of those charges will be recognized during Cisco's fiscal fourth quarter, whose earnings Cisco is scheduled to report on Aug. 10.