Thread regarding Cisco Systems Inc. layoffs

When customers bypassed Cisco to successfully build their own gear (Google/Facebook/Linkedin/Microsoft) you knew the company had lost its way.

The “big” and “rich” thing is how Nortel went to zero.

Rich? Or course this is true.

Cisco very carefully manages finances and has set up BV financial structures to minimize taxes and keep profits out of the US and it’s high corporate tax rate.

Why do you think everything shipping to EMEAR ships out of the Netherlands and for APAC ships out of Hong Kong?

Why is SW development and all of our IT support and employee support done in India?

They only bring cash back to the US when it can’t be avoided.

@3mot

If the company is so great, why does it keep on having these LR cycles?

If the company is "rich", why doesn't it use its "net profits" to build a formal annual review system to formally rate employees so that when a decrease in headcount is needed, those low performance employees are targeted.

How can a giant company run on no formal performance reviews? How does that even make sense?

No formal reviews only makes sense when you need an ongoing harvest of the general population to in turn fund the company's "rich" upper management by BS'ing the market that there is a perpetual increase in "net profit".

The same post was here 6, 9 and 11 years ago during previous major LRs. And Cisco is still here, still big, still rich, still mostly growing in net profit... I hope your next company will also be here by the next crisis. Good luck finding a company as good as Cisco

Don’t forget Fran the poli sci grad ... laughing and calling the reductions a choice.

That was the genius of her idea, we’re actually choosing to lay ourselves off

You can be a walking dead company for a long time.

You may be right but the stock market has almost nothing to do with reality.

I also blame JC, and ultimately the board. He boards are all in ceos pockets nowdays. They scratch eachothers back. GM wanted to get span and control cleaned up so then all the middle managers campaigned against him becoming ceo so he left.

The future of technology is cloud and enterprise software. What cloud or enterprise software solutions do we offer? NONE

Do we have the capability to build cloud or software products internally? NO

Completely agree, Chuck and Kelly claimed victory with smoke and mirrors these years.. They never really understood Cisco’s business. Good at math and accounting though.

1. Dividend payouts/Stock buybacks. Was only 40-50% of cash flow. Now 65-70%. You may have noticed zero stock buybacks in Q4. No cash.

2. Stupid acquisitions that might make the growth look good for 3 qtrs. Pay leaders of acquisition crazy coin to stay and b.s. for 1-2 yrs. the. Leader leaves to repeat.

3. ‘Managing’ the business. Whenever orders were strong, they gave the word to tap the brakes on shipments to ‘smooth’ out the business or orders weak, crank up the shipments. Which hid the underlying business health.

4. Software business model. Charge way less for sw subscriptions than perpetual. Customers don’t buy perpetual. Cisco gets less revenue. Chuck and Kelly can claim SW business model/deferred sw revenue working and growing. The 20+ yr Cisco SVP vet that developed this brainchild jumped ship to google to compete against Cisco.

The bigger issue Is the Cisco business model is screwed up and has been. Cisco is underfunding R&D and innovation and way over invested in sales and overhead. R&D should be 18-20% of revenue not 10-12%. Cut all the extra Vp’s/SD/directors that only coordinate within the company. Decentralize the engineering to move faster, not these big groups run as a service depot. Whatever happened to 250:1 VP span of control and 50:1 director span of control targets across the company? Bring it back.