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San Jose's networking kingpin Cisco is planning to hand out about 1,300 pink slips, which equates to 2 percent of its workforce, as it attempts to cope with a sluggish global economy and flat sales. The latest round of layoffs come just one year after Cisco announced 6,500 job cuts, but reducing jobs is not a cure-all to Cisco's problems, nor is a weak economy the only thing the company has to worry about.
Less than hour after Cisco announced the planned layoffs, VMWare said it was acquiring Nicira for $1.26 billion. A Bloomberg report called the back-to-back announcements a "double whammy," noting that Nicira develops technology that lets businesses enjoy networking features without having to buy costly hardware.
"VMware's purchase of Nicira underscores what may be an even bigger problem -- companies may simply not need as much Cisco gear," Bloomberg writes.
Cisco, which had 65,223 workers as of May of this year, said in a statement that the job cuts "are part of a continuous process of simplifying the company, as well as assessing the economic environment in certain parts of the world." How many of those job cuts will affect the Bay Area is unknown at this time.
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