Cisco Cuts 8,000 Jobs in a Year More Cuts Likely to Come
Cisco is eliminating another 1,300 jobs on top of the 6,500 eliminated this time last year in a cost cutting strategy, bringing the total cut to almost 8,000 in a year. This is a significant cut in workforce made necessary by a declining stock value, and decreasing sales.
The latest cuts come as global IT spending continues to fluctuate, competition stiffens, and enterprise spending is shrinking. Cisco has remained steadfast with pricing, but may need to evaluate its pricing structure against valid competition, that continues to challenge Cisco in the network device arena.
Though Slimming the company and working towards maximum efficiency is a good idea, Cisco will need to evaluate all aspects of the business and may require eliminating or selling off additional divisions or previous acquisitions in order to see a turnaround in the stock market. With Cisco stock sitting today in the $15 range, Juniper right on its heels, and Netgear leading at $32, the demand for lower priced solutions seems to be apparent.
It would seem that with cloud integration and data center build outs being necessary to meet a growing cloud demand; Cisco would be flourishing. However it may be that cloud companies are seeking alternative options for infrastructure to keep costs down. Though Cisco products have always been well regarded in the space, price may be the determining factor for infrastructure purchases.
What is known is, if there are not turnarounds quickly within the company, there will be additional layoffs to come. Cisco will announce its Q4 earning in the middle of August and if the news continues, it is only inevitable that more cuts will follow.
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Cisco market cap = $81.0B
Juniper market cap = $7.8B
NETGEAR market cap at $1.2B
Let’s not confuse stock price with company value in the market.
You are correct Jay and obviously Cisco is the global leader in networking and employs many more than both of those competitors combined. Competition is obviously putting pressure on the company and as a whole competition in our industry is a good thing. I hope that Cisco will evaluate pricing and answer to the competition by providing solutions on par (from a price standpoint) and make Cisco a no-brainer for cloud infrastructure deployments.Great point on the valuation…