Editor's Corner: Will Cisco's CEO provide color on company's layoffs during earnings?

Cisco is reporting its first quarter earnings today and hope springs eternal that CEO Chuck Robbins will provide some details on the company's job cuts. But don't hold your breath.

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To date, Cisco has provided few details about its layoffs. While a company of Cisco's size is no doubt constantly hiring and cutting employees, the Covid-19 pandemic has accelerated job cuts this year.

According to a thread on TheLayoff.com, more than 7,100 employees will be let go, but that number dates back to October. While Covid-19 has impacted Cisco's bottom line, the layoffs started in February before the pandemic took off the following month.

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In August, Robbins said that Cisco, which has about 77,500 employees as of July, was instituting a restructuring plan that was expected to recognize a related one-time charge of about $900 million. Over the next few quarters, Robbins said Cisco would be taking out over $1 billion on an annualized basis to reduce its cost structure, which included the layoffs and early retirement packages.

Cisco has refused to discuss the actual number of layoffs, and the areas that would be most severely impacted by the job cuts, which is all within its rights. If I were investor, which I'm not, I would want more specifics. According to recent posts on the TheLayoff, employees are also lacking visibility into Cisco's plans.

"I fully expect another sh–ty earnings and more excuses from ELT (executive leadership team) while they lay off more folks," wrote one Cisco employee. "The ride has only begun."

"Cisco is providing the illusion of transparency to avoid any real risk," according to another post. "They also have been in this insane layoff cycle for DECADES, keeping employees in a permanent state of fight or flight fear. Draining and toxic. ITS ALL FAKE. Managers in our area are being bumped up to directors, getting FAT raises. It’s all just a power shift and sicko VP’s play the survivors like puppets. Disgusting."

Posters on the site have also complained that those who haven't lost their jobs are still held to the same delivery schedules while their workloads have doubled.

“It has been a mess from operations, engineering, IT, to Sales. Some areas report that they have to cover more with fewer people," according to another post. "Some support groups completely ignore requests. Then operations try to delay the execution as much as they can. The morale has hit a new low."

It hasn't been just rank-and-file employees that have lost their jobs. Cisco's early retirement program has led to the exit of some long-term executives and employees, according to a story by CRN, as part of its restructuring effort.

Cisco in flux

Robbins, who took over the helm five-years ago from the gregarious John Chambers, has worked diligently to heave Cisco away from being a hardware company to one that banks more software revenues. Several years ago, Cisco announced its intent-based networking (IBN) initiatives. IBN, which has largely been embraced across all of Cisco, is, in short, a software driven automation model that allows an administrator to set the desired outcomes for network orchestration. 

Some experts have said that Cisco would have been better served by turning its attention, and market weight, towards the cloud much sooner than it has.

While Covid-19 led to supply issues for vendors during the early going, Cisco has been faced with a malaise in its service provider division dating back to last year. Small to medium-sized businesses (SMBs) have been particularly hard hit by the pandemic, which has also impacted Cisco. On the plus, Cisco could see a lift in its enterprise division along the same lines as competitors Juniper Networks and Arista Network did in their recent earnings reports. Cisco has branched out by developing its own chipset, Silicon One, which it recently updated.

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In early March, Cisco created new business groups that it said would allow the company to "stay closer to our technology solutions and uniquely solve our customer challenges." Around that same time, David Goeckeler, who had been at Cisco for 19 years and was Robbins' right-hand man, left the company to be CEO of data storage firm Western Digital.

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Righting the ship is Robbins' job, which no doubt has made him, and his executive leadership team, highly unpopular in some Cisco employee circles. It's easy to make angry, anonymous posts on a website, but no one likes losing his or her job, especially now.

As the editor of my first tech publication (Boardwatch) once said many years ago: "It's hard to imagine the telecoms industry without Cisco," during a past crisis. The old Cisco is gone. The new Cisco is still a work in progress for a variety of reasons, including more competition from a host of more nimble startups, such as virtual routing vendors. Robbins has his hands full, but will he continue to keep the layoff cards close to his chest?