Cisco may need to shed 5000 jobs: analyst

By Liam Tung on Jul 12, 2011 7:28 AM
Filed under Communications

Marriage with EMC could make sense.

Cisco could be forced to shed 5000 jobs in order to maintain its competitiveness, according to a researcher at a US investment bank.

The cuts would represent seven percent of Cisco’s 73,000 workforce and would lower its expenses by US$1 billion annually, according to a widely reported research note by Gleacher & Co analyst Brian Marshall.

In addition to cost cutting measures, Marshall also pointed to the sense of a merger between Cisco and its long time partner, storage vendor EMC, which would help to strengthen both companies' offerings around data centre and cloud solutions.

Cisco intends to shed light “on the cost reductions, including layoffs” in its August 10 earnings call, spokeswoman Karen Tillman told Bloomberg

In May analysts were expecting Cisco to cut up to 4000 jobs -- its largest cuts since 2002, after the April 2001 tech wreck.

However, unlike previous layoffs, Cisco does not face a collapse in stock valuations, but rather mounting pressure from rivals, such as HP and Juniper Networks, and video-conferencing rivals such as Polycom.  

HP today boasted the 2.5 per cent gains it made in Layer 2 and 3 Ethernet switching revenue in the first quarter of 2011 at a time when Cisco’s share fell 5.8 percent. For its part, Juniper Networks continues to enjoy stellar growth as it challenges Cisco in key markets.

Follow us on Facebook and Twitter

Copyright © . All rights reserved.

Cisco may need to shed 5000 jobs: analyst
Top Stories
Intel unveils new CPU to spark enterprise PC refresh
Cuts the cord with 5th gen Core vPro.
Channel chalks up bumper December
Super-sized sales for Thomas Duryea, Missing Link, UXC and others.
Sign up to receive CRN email bulletins
Which was your strongest quarter of the 2014 calendar year?

Latest Comments
CRN Magazine

Issue: 334 | December 2014

CRN Magazine looks in-depth at the emerging issues and developments for the channel, and provides insight, analysis and strategic information to help resellers better run their businesses.