Cisco may be madly enthusiastic about its Cius tablet, but investors aren’t so keen, and so the company has has officially confirmed plans to axe 6,500 jobs in an attempt to save $1bn every year. According to a recent SEC filing, Cisco is cutting 9-percent of its workforce after attempts to stem the flow of cash losses by shutting down the Flip camcorder business failed to convince shareholders that the company was taking its core networking business seriously.
Around 2,100 of the staff losses will be through voluntary early retirement, which Cisco has already negotiated with its employees. Those redundancies in the US, Canada and “select countries” will be announced in the first week of August, with the remainder worldwide to be revealed at a later, unspecified date.
While cost-cutting is Cisco’s stated intention, the downsizing will cost it significantly. Overall, the combination of redundancies and early retirement offers are expected to exceed $1.3bn over the course of 2011 and 2012, with the bulk in Q4 this year. It won’t be the only cost-cutting the company attempts, either: Cisco has warned of other restructuring charges incoming as a result of its attempts to “simplify the organization, refine operations, and reduce annual operations expenses.”
Whether that – or the expensive, $799 Cius tablet – will be sufficient to turn around Cisco’s financial future as a whole remains to be seen.