The Cruelty is the Point

Imagine being told that perhaps you and 6,000 of your 85,000 colleagues will be laid off.
Then imagine hearing that you will know if you are on the chopping block "at any point between now, August, and October 15th ?

Would you consider an employer who subjected most of the 85,000 employees to two months of fear and uncertainty "a great place to work?". I know the answer to that. It should be no surprise then that the "Great Place to Work" awards are 100% a scam. Cisco HR has a "pay to play" relationship with the Fortune 100 list. It is reminiscent of the Guinness World Records approach. While there are employee surveys there are also statistical smoothing operations that favor the applicants willing to pay the fees.
Now, don't get me wrong, Cisco has some very good qualities. The remote work model and time to give are great perks. The culture is pretty good in many areas.

In fact, in years past, Cisco was considered a contender. They showed up on the financial news cycle as a tech bell-weather. The culture and pride was immense.

The swagger!

Cisco named their price and set the terms. Nobody got fired for buying Cisco. They sold ISR routers and Cat switches by the truckload.

but then...

in the mid 2000s, "Cloud" came and Cisco missed that market transition with a bunch of goofy acquisitions and fumbles.
in 2017 Cisco went on a shopping spree to play catchup in SDN (Software Defined Networking) and Cloud. Appdynamics, Viptela for SDWAN, Springpath for Hyperconverged and Broadsoft for collaboration. More big buys and more silos.

Meraki, AppD, DUO, Viptela, Webex... the list goes on of horribly onboarded acquisitions. What's a Cisco?

for 25 years a Cisco was a Network, now, a Cisco is a cloud maybe on-prem maybe virtual subscription based hodgepodge of overpriced hardware and bug-ridden software. and don't get me started on TAC...

Splunk, a $28 Billion Dollar splurge, is a disaster.

Cisco is, once again, late to the technology table. This time AI is passing them by.

Naively, Cisco thinks uttering "Nvidia" and "Copilot" every few slides will provide enough credibility.

Nobody, I repeat: Nobody is going to buy a Cisco server to train their AI workloads. They are not going to buy Cisco networking gear to pump AI data (Nvidia is about to eat their lunch). Why?

Cisco calls HyperFabric a "gamechanger". It is not.

Nvidia does not need Cisco and is already so far ahead its a joke.

Nvidia is releasing Spectrum Ultra X800 Ethernet Switch 512-Radix - a Cisco ki-ler
Nvidia built Rubin, a networking GPU - another Cisco ki-ler
NVidia bought Run.ai to handle orchestration
Nvidia NVlink Switch Chip is yet another Cisco ki-ler.

Nvidia has the swagger, Cisco is a decrepit dinosaur who is hemorrhaging cash to chase the AI bo-m 2 years late!

$28 Billion for a legacy networking tool shop with some big data chops will prove to be a death spiral for Cisco.

The 6,000 cut to "rebalance" into AI, Cloud and security is another move away from core competency. Cisco has so much technical debt in every silo they've bolted on in the past 15 years that it will take them 5 just to debug half of it.

If you are going to lay people off, do it right and do it quick. Now you have 80,000 sleepless, stressed and unhappy employees just a-waiting for the axe to fall.

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But...is Lawrenceville affected?

Some companies lay off people because they are losing money. They simply can't keep it going.

Some companies lay off to maximize profits.

Some companies lay off people to goose their racehorse.

These big, semi-annual layoffs that Cisco treats the market with are meant to trim the fat and squeeze more productivity out of the remaining staff. In the short term this makes the business more profitable. scared workers are more productive

But this only work to a certain point. THe best workers won't tolerate the increasing frequency of

uncertainty and
huge spikes in workload every christmas and late summer when the fat gets trimmed and they're left to clean up the mess

So you are left with "the middle" and after a few cycles of this playing out you start laying off the loyal, efficient productive workers.

My hunch is that ELT is goosing this racehorse in hopes of a fat farewell check.

The whole GAAP vs Non-GAAP thing is also a smokescreen. most-used type of non-GAAP is EBITDA—or earnings before interest, taxes, and depreciation.

Earnings before interest, taxes and depreciation!

Interest is a real cost and rates are sky high now
Taxes are a real cost and going up
depreciation is a real cost

EBITDA is the "fake news" of finance.

simply put, Wall Street swallowed the baloney about reallocation into AI, CLoud and Security.

I expect the stock to drop like a lead zeppelin pretty soon.

Buy the ticket,
Take the ride.

Hunter Thompson

who don't have to worry about mortgages, college costs or medical payments.

You talk about European working class? :P

It's a sick game with people's lives played by detached, rich wannabe celebrities who don't have to worry about mortgages, college costs or medical payments.
# The People Deal - what a hypocrisy!

Cisco like any large company is affected by "Innovator's Dilemma" or the broader concept of "Disruption Theory" developed by Clayton Christensen.

Exact Statement:
The idea is that large, successful companies often struggle to innovate internally due to their established processes, bureaucracies, and focus on sustaining innovations that cater to existing customers. As a result, they tend to acquire smaller, more agile companies that are better able to innovate or have already developed disruptive technologies. This process allows them to stay competitive without having to disrupt their own successful business models.

In essence, these large companies face a dilemma: they can either continue optimizing their existing products and services, which risks being overtaken by disruptive innovations from smaller companies, or they can invest in risky new ventures that might not align with their current business models. To avoid this dilemma, they often resort to acquiring smaller, innovative firms.

This explain why Cisco is buying.
The lack of vision and the bad timing ruined even this otherwise viable way to evolve. Look at Microsotf aquisitions: github , skype,linkedin and others over the years.that is how you do it.

Mellanox was an interesting company. They were an Israeli company but they also had a team of Palestinian programmers in Gaza. Their Infiniband prodcuts were second to none. They also had good RoCE (RDMA over Converged Ethernet) capabilities. NVIDIA's ConnectX products are all from Mellanox.

great post

All well said but you forget the stock still went up and they are still on top while those who work for them still get the axe and go home! Investors were ok with this lay off and in fact, Bloomberg news on 8/14 stated “the first lay off was not good enough to INVESTORS, this second one in August will be enough to free up operational margins per investors for the stock to go back up. That’s exactly what happened after this announcement! Investors are happen stock went back up to nearly 50 bucks a share again! End of story unfortunately!

Excellent post here, if CR has not figured out how to implement layoff this time, please fire himself first, and this will solve all of issues, he has been stay the CEO position over a decade, and has demonstrated he is unqualified for this position.

Amen! This will go down as a case study of poorly plan and executed layoffs for generations to come to avoid companies like this!

This was well said!

Nvidia bought Mellanox.

Thread regarding Cisco Systems Inc. layoffs

The Cruelty is the Point

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