Cisco may be bigger and bolder in its cost-cutting plans than first anticipated: it has been revealed the firm is getting rid of close to 10,000 staff worldwide. The initial figure touted by Gleacher & Co analyst Brian Marshal yesterday was half that, which he estimated would cut the networking behemoth's annual expense base by …
Cisco is the next Sun
I have seen this story before. Too much success, too much money, no clue what to do with it.
Failed new projects, failed acquisitions, falling stock price.
In a few years Oracle will buy them for $3.5B
That's inflation for you
Lower down on the Reg arse feed Cisco are possibly losing 5000 - do you reckon they've gone "well, we've started . . ."
So, am I misunderstanding or do these ~10,000 people each make ~$100,000 annually? That's a LOT of high-paid people. If that's the case then no wonder they are having disappointing financial results.
Salary is only part of it
In the US, an employee's health insurance and other benefits cost a company nearly as much as his salary. So the average laid-off employee would be paid roughly $50k annually, which isn't high by CA tech worker standards.
benefits cost != salary
Don't know where you get your numbers from. The company's share of Medical/Dental/Unemployment/SocialSec does not cost as much as the employees salary. Not at any of the companies I've ever worked for. The single biggest cost is Medical. IIRC I pay 20%, the company pays 80%. All told the company's costs are less than 20% of my salary. A recent college grad with a starting salary of $50k/year probably won't be paying for family coverage, so the company cost for his or her medical might be only $8K/year, still less than 20% of salary. The other things like Dental, Social Security, etc, are small money compared to the Medical. Yeah, if you're a receptionist making $40k/year and have a family, then the numbers look different. I don't think Cisco is laying off 10,000 receptionists though.
And I don't grok what you mean by laid off employees being paid $50k annually? Laid off employees in big tech companies here may get a severance package, usually their salary for one to N months, where N may a function of their years of tenure. Laid off employees of small tech companies probably get nothing.
costs are about 2x salary 100K = £63K so salary so average 31K
IT takes another one up the...
I really do wonder if it's time to change careers. And countries.
Everything remotely technical is getting shipped offshore - in most cases with a corrosponding drop in quality. So I want out.
Snags is, there doesn't seem to be any skilled careers which would encourage me to stay in the UK, as it's *all* going offshore.
And no...I'd rather not do management. Britain is becoming a country of mediorce managers already, but managing less and less - afterall, once you get cheap labour, why don't you get the cheap managers to go with them?
In the 1970s, people stopped buying british cars, motorcycles...
The word cheap is banded around quite a lot. Some of the off-shore guys I'm working with are highly educated, technically sound, decent, polite etc. - in fact, a weakness might be the inability to say "no, I can't do that in time". I've not experienced a drop in quality - in fact, often quite the opposite.
Off shoring is not *cheap* but is often good value but I agree with the sentiment. We should all stop buying Chinese goods, Vietnamese made shoes, American software...
"Everything remotely technical is getting shipped offshore"
Plenty of people I talk to mention the difficulties of filling the vacancies they have for highly skilled coders, project managers and sysadmins; apparently you're doing a poor job of hunting for better employment. Or you have lousy social skills. Or you overvalue your technical abilities. In the latter case, I've no sympathy with you at all, and trivial labour is always going to get sent out to someone cheaper.
While searching for work in my 2 years of unemployment I heard many figures running from 100 to 1000 applicants per role. Those I got through to the interviews for said I was the strongest or one of the strongest candidates for the role but gave it to someone who was already working in the NHS/just had that tiniest of edges on me/they thought wouldn't get bored with the job (an actual reponse to one a position I interviewed for but they thought I was vastly overqualified).
After 2 years I was getting "you have the experience we're looking for, but you've just been out of the industry for too long" without offering to give me a chance to prove I could still do the job. Now I've switched from being a netadmin to designing WANO/load balancing solutions.
There's loads of us who are perfectly skilled and capable of filling these gaps you talk about, but we're being disqualified for spurious and dumb reasons.
"people I talk to mention the difficulties of filling the vacancies they have for highly skilled..."
People aren't usually born highly skilled. I achieved my highly skilled status by performing any number of entry level positions from cable monkey, telephone software support etc. on upwards.
Without the lower level jobs, no-one gets to be highly skilled.
It's a self for filling prophecy
I work quite a lot with offshored people. I have a project manager right now from India. He is F****** good at his job. Sure it's not optimal that he is sitting in India, and is only up here when we really really need him to be here.
And that is a clear problem. But mostly what I've seen around in the business is management that doesn't really understand the business they are in. That don't understand that you cannot take a something that perhaps requires 1-2 very skilled people and just offshore it to 10 entry level people. You'll foobar whatever you are trying to cut cost on. Sure you can find very skilled people in the typical offshoring countries, sure you can. But the prices are different.
And I can assure you, that you for example don't find many 'mainframe people' in the Ukraine, russia or China with 15 years of experience.
And when you offshore without knowing what you are doing, your local guys end up having to clean up, and the cost of cleaning up goes on your local budget, which makes you more inefficient which leads to more offshoring which leads to more cleaning up which ..........
Note that I'm not saying that you shouldn't have people sitting in other countries.. But you damn well have to know what you are doing.
Simply MORE corporate scum.
Like they need the money from these cuts.
Sorry, but we don't make that here anymore. Like Anonymous said, the big guys have mostly managers here now -- and even those are getting scarce. But I think AudiGuy is on to something, this isn't really about *needing* to save money -- it's just that the corporate brain trust either can't or won't look to any other metric for executive performance (you know, like organic growth in market share as opposed to growth by acquisition). It's a failure of imagination on the part of the guys who make the big bucks to spend all day thinking about these kinds of things, which is ultimately they are doomed as well.
We call it management by balance sheet
It doesn't take much to listen to the stock analysts and put the pen to paper to figure you need to layoff X employees or offshore Y jobs to get your numbers looking the way you're told. We always joke about how easy it would be to offshore those jobs - I imagine even a dufus like me could write the process doco for it - and imagine all the money that could be saved by doing that :D
More typically the dysfunction in these companies is much more fundamental than anyone cares to admit, and more difficult to address than the execs are willing - or capable of addressing.
Lack of imagination, lack of vision, and often a lack of understanding of the fundamentals of the businesses they're running - IMHO at least - are the real problems. In lieu of real leadership, pick a target and roll it down the hill... rinse/repeat as necessary :(
The execs will still get large bonus money and the layoffs may be making way for that.
Perhaps shifting kit, made and designed in the PRC is not paying what it once with the steady stream of knockoffs flowing out of there.
I'm sure the PRC inserted malware in networking kit is not helping new sales either.
At least Cisco (still) has money in the bank.
Yesterday i was so afraid that cisco will kill its consumer products, that i bought 2 of their cheap gigabit switches for home networking. Now I realized that I needed only 1 really. noes!!!!!
Need to make big savings to improve bottom line - Lets Cut staff
Report great savings and rake in the bonuses
Round table meeting why projects, etc cannot be delivered - No enough staff
Go on a hiring rampage for 24-36 months
End of 3-4 year cycle start the ride again
Sounds similar to what happened to them about 10 years ago during the last recession, they came back then and probably will again. Cisco kit is still considered a standard of sorts, to the point that network engineering job listings still ask for "Cisco" experience or Cisco certification as a plus or even a requirement. What disturbs me the most is that jobs are not the only thing being off-shored these days. Data distribution hubs are starting to pop up overseas too and that bodes badly for all kinds of networking jobs.
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