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Only the Big Fall Hard

Cisco is the Microsoft of the networking world. Look at the companies it either killed outright, bought, forced into other mergers or at least decimated. Remember 3Com, Cabletron, BayNetworks, Nortel, Ascend, Banyan and Wellfleet? This is as much carnage as we've ever seen in software.

Cisco either bought or killed its main rivals, so it should be flying high, right? Not bloody likely. The network king is about to boot 10 percent of its workforce -- that's about 6,500 workers. Great timing given our economy and lack of tax revenues.

Of course, Cisco tried to make it seem like a good thing. By getting rid of all this dead weight, the company can finally "focus on a network-centric growth strategy." That has to boost the ego of all those pink-slippers who held the company back all those years.

I can't blame Cisco. It really was pushed to the edge. After all, in its latest quarter, it made only $1.8 billion on sales of around $10 billion. Gosh, those margins are a tad less than 18 percent. What a kind company to only fire 10 percent of its workers!

I am not a scion of industry, but this just seems wrong, the same way it was wrong for Microsoft to boot 5,000 workers just to improve its margins. Am I a Commie or a commonsense American? You tell me at dbarney@redmondmag.com.

Posted by Doug Barney on 07/22/2011 at 1:18 PM


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