Cisco has announced that they will lay off around 10,000 employees in an effort to reduce costs and regain profitability. 7,000 positions will be cut and 3,000 people will receive early retirement under this initiative.
Some reports say that Cisco is thinking to sell off its Linksys Home Router business unit, while it has already shut the Flip camera unit. With the above changes, Cisco is expecting to save around 1 billion dollars in 2012.
The company is focusing more on the routing and switching business, something which has been its core business since the company’s starting days. In this market however, Cisco lost market share by 6.4% (now it has 54.2% of the total market) with rivals like Juniper and Alcatel-Lucent gaining ground. This has been alarming for Cisco which is trying hard now to regain the lost market, especially in the Enterprise and Service Provider routing and switching business.