Cisco raises axe above 14,000 staff – reports

Good luck, Cisco.

Cisco Lay off employees every 1 or 2 years, which become one part of its culture. This makes almost impossible to maintain young and good talents ---- every time, they will be throw out of door because of balance. Also, every time they reduce the staff, within one or two years, the number of employee will bloat soon. Why, so many average managers, they tried to promote and protect themselves by hiring. This is also why Cisco can't deliver their own vision and depends on MPLS. Without cutting those middle mens, Cisco can't go anywhere.

Software-defined is just another excuse Cisco upper management can't handle the change.

Good luck, Cisco.

Not exactly surprising.

Another year, another round. Not surprising.

Here's hoping the packages are as good as the one I got a couple of years ago...

Hardware

Humm, I wonder Huawei will be left to manufacture and sell the hardware?

Same old song

In the 90's Cisco said they were a "software company." In 2000 Cisco said they were a "software company." In 2010 Cisco said they were a "software company."

Cisco should stop trying to dupe the uninitiated and just say what it is -- a layoff because the economy is taking and they need to cut costs, mismanaged business, cutting out the slackers, whatever.

I get the whole need to make things palatable for public consumption, but seriously, when you are talking 20% of your employees you need a new song.

competition is brutal

Core?

Cisco is having to compete with novel designs that are cheaper, faster, more compact from Brocade, Huweii, Dell, etc. Huweii is predominant in Asia where IT infrastructure growth's still occuring.

As stuff moves to the cloud, fewer (higher margin) core switches are required.

Cloud companies are rolling out more flexible software-defined networking, instead of opting for traditional (i.e. Cisco) rigid hardware-defined designs.

Edge?

What's left at the edge is being eaten by lower cost enterprise competitors - Brocade, Dell, HP, Enterasys/Extreme, Alcatel, etc.

The ankle biters - Netgear etc - are all moving up in this space too.

Smart Net?

Only dummies bought Smartnet on their edge switches - (always cheaper to stock spares) and with Cisco resellers rolling out their own versions of smart net at lower cost, less is being booked on the remaining core sales.

Servers?

Cisco's done well to capture a small but profitable slice of the server business, but it's struggling to grow further vs HP and Dell, due to the main growth coming in OEM vendors - aka cloudy tin.

Conclusion?

Watch Cisco's gross margins in their quarterly reports.

Cisco has significant and systemic structural issues, it appears. The headwinds are against them.