Cisco is Laying off Workers Once Again

It seems that the technology giant cannot escape the troubling times the economy is presenting. Cisco is expected to lay off about 4,000 jobs within the next month or so according to the CEO’s wishes. John Chambers, the CEO of Cisco Systems, wants to cut spending by $1 billion and he sees eliminating jobs as a great place to start. The company is expected to go under the 70,000 worker mark after the cuts are completed, bringing the total of layoffs in the past year to 8%.

This huge set of cutbacks in employment is the largest since 2002 when the internet finally slowed down in spending. In fact, this is the same time that start-up companies and many of the older companies rushed to make their presence known on the web.

The company had a reason to lay off workers back then however it cannot say that market conditions are the reason for this round of cutbacks. In fact, Chambers did something that the world is not used to seeing; He blamed himself for the recent decline in the company’s issues.

Cisco had plans to incorporate some new businesses and most likely most of the cuts will come from Cisco dropping out of negotiations with those companies.

Just a month ago, the company stated that it was dumping the new “Flip” video camera line which takes away almost 600 jobs and costs the business $300 million. Chambers stated that more of the company’s side businesses will fall by the wayside but did not hint as to which ones.

Analysts from Wall Street said they are proud that Cisco is taking such drastic steps in restructuring the company saying that it was about time for the company to jump back into the game. “It’s hard to criticize the pace and scope,” said Colin Gillis, an analyst with BGC Partners. “We all love the billion dollars in cost savings, but you never cheer people losing their jobs.”

Even with the cuts being eminent, the stocks continue to decline steadily with no end in sight. “Part of the issue in there is competing with lower-priced competitors,” said Alkesh Shah, an analyst with Evercore Partners. “By cutting these costs — as well as being more aggressive in pricing — they will be able to be more competitive.”