Sunday, July 17, 2011

Cisco Confirms 6,500 Job Cuts, Additional Transfers

Cisco confirmed a workforce reduction of approximately 6,500 employees, including approximately 2,100 employees who elected to participate in a voluntary early retirement program. The cuts will occur across the global workforce across all functions.

Cisco said the job cuts include a reduction totaling approximately 15 percent of vice president level and above employees. This represents a reduction of approximately 9 percent of Cisco's regular full-time workforce.

Cisco plans to notify impacted employees in the United States, Canada and select countries during the first week of August. The remainder of the global workforce reductions are expected to occur at a later date in compliance with local laws and regulations.

Cisco said these cuts will result in pre-tax restructuring charges to its GAAP financial results of no more than $1.3 billion over several quarters, consisting of severance and other one-time termination benefits.

In addition, Cisco will sell its set-top box manufacturing facility in Juarez, Mexico, to Foxconn Technology Group. The approximately 5,000 people employed at the facility will become employees of Foxconn in the first quarter of fiscal 2012 and no job losses are expected as a result of the sale. This figure is in addition to the approximately 6,500 employees impacted by the reduction in workforce and the voluntary early retirement program.