Cisco Announced 6,500 Layoff And Sell Plants to Foxconn

Published: 30th September 2011
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Cisco said today, ready to lay off 6,500 people, accounting for 9% of full-time employees, saving $ 1 billion. Meanwhile, Cisco also intends to sell in Mexico City a manufacturing plant to Foxconn.

6,500 job cuts the cost of $ 1.3 billion
Cisco ready to spend $ 1.3 billion as a one-time cost of layoffs. Prior to this, long predicted that Cisco will carry out a large layoffs, but time quickly than people expected.

Cisco said in a statement: layoffs will affect "about 15 percent of the vice president level and above the level of staff." Layoffs among the 2,100 who had earlier voluntary early retirement. Cisco said that all affected employees will be notified the first week in early August.
United States, Canada and some countries are laid off union notified the first week in August in place, there are cuts in some countries depends on local laws and regulations will be announced later.

Affected by the layoffs, Cisco expected pre-tax restructuring charges, according to common accounting standards will reach over $ 1.3 billion, affecting several quarters, including a one-time severance payments and other benefits. All costs are all cash in nature. Cisco is expected to cost approximately $ 750 million in the fourth quarter of fiscal 2011 to confirm which $ 500 million of voluntary early retirement and early related to the project. The remaining costs will be confirmed in the 2012 fiscal year.
Sell ​​plant to Foxconn

In addition to layoffs, Cisco said that it would sell Juarez City (Mexico City) set-top box manufacturing plant, took over the party as Foxconn. Through the sale, there will be 5,000 people bid farewell to Cisco, which does not include 5,000 layoffs in 6500 people within.

Cisco said in a statement, the sale is the company's efforts to streamline operations of the step, can also support Foxconn to better meet local customer needs. Cisco said: "We will work closely to ensure stability of the transition, customers and staff will minimize the impact."

Plant in Juarez, a total of 5,000 Cisco employees, Cisco 2006, it was acquired from Scientific Atlanta come. Factory mainly produces video and communications equipment, provided to the service provider market. Cisco's strategy has changed, it will work with contract manufacturers (foundries), to provide customers with products sold consistent with the strategy.

Foxconn communications and network solutions business group general manager Maike Lin (Michael Ling) said: "The alliance with Cisco's combat readiness, we will continue to make good use of talent, technology, video and communications infrastructure, experience and broaden in the video, broadband, network, telecom infrastructure equipment in the field of vertical end to end supply chain services. "

The transaction is expected to end in October this year.

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