Cisco to Shed 2 Percent of Workforce Worldwide

Cisco Systems (NASDAQ: CSCO) said it will let go 2 percent of its workforce, or an estimated 1,300 of its 65,000 employees worldwide, as a “routine” action to improve its decision-making and agility.

According to published reports, the cuts are tied to Cisco’s larger cost-cutting measure to save $1 billion over several years, including the demise of about 10,000 jobs last year.

In confirming the layoffs, Cisco issued a statement that read: “We routinely review our business to determine where we need to align investment based on growth opportunities. Additionally, we continue to evaluate our organizational structure as part of our plan to drive simplicity, speed of decisions and agility across Cisco.

“As we focus on both of these efforts, we are performing a focused set of limited restructurings that will collectively impact approximately 2 percent of our global employee population. These actions, subject to local legal requirements, including consultation where required, are part of a continuous process of simplifying the company, as well as assessing the economic environment in certain parts of the world.”

Based on several reports, none of the cuts appear to reach Cisco’s worldwide channel organization. One website reported that Cisco let go 400 employees in its Collaboration Business Unit, mostly impacting WebEx sales personnel. Another outlet, citing informed sources, said that the company furloughed its entire Wide Area Application Services (WAAS) sales team.

Cisco did not provide any details as to which of its units will see cuts.

The workforce trimming comes about two months after Cisco warned investors that its Q4 2012 revenue and earnings will come in well lower than expected. In May, Cisco said it expects revenue growth for the period will increase by as little as 2 percent year-over-year, well below analysts’ expectations. The vendor will announce Q4 and FY 2012 earnings on Aug. 15, 2012.