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Firing people to hire to others, with other skills. This is what the last 5 years John Chambers, Cisco’s ever-present boss, to adapt to the new market routers. Last Wednesday, the network equipment maker announced it was cutting 6,000 jobs, or 8% of its workforce of 74,000 people. This brings to nearly 26,000 the number of layoffs since February 2009, but decided during this period, the overall number has continued to increase in net (8000). Cisco continued to recruit, buying start-ups.
These are tough times for the pioneer of network equipment. Sales fell for the first time in five years, $ 47.1 billion for the fiscal year that ended in July. In particular, sales of routers and high-end switches, the heart of business, fell 7% and 4% respectively. The strong growth of data centers, cloud and security are not enough to hide the decline.
First there was the emerging markets that do not keep their promises. But the real drama of Cisco, is the arrival of the dominant networking software, or “software defined networks” (SDN). The telecom players and the Net are not buying as much material than before, as they prefer to put much of the routing functions in the cloud, on unmarked in data center servers. It costs less and is more flexible.
Huawei, Alcatel-Lucent, Arista positioned themselves on the SDN market. Cisco has decided to support the movement rather than submit, but must say goodbye to above 60% of its owners machinery gross margins. “The market waits for no one. We will be the leader in point-bar “, said John Chambers a martial analysts. We’ll have to fight.
Solveig Godeluck
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