Will Cisco CEO Get The Boot?

Cisco has slashed its forecast revenue increase by more than half, while rumours circulate about the possible departure of its long-serving CEO.

Cisco previously expected to increase revenues by 12 to 17 per cent over the next three years, but it has revised this figure downwards to a much smaller five to seven per cent, according to the BBC. It expects profits, however, to be seven to nine per cent for this three year period, which is a healthy profit forecast for a company that has been struggling in the recent economic climate.

Cisco’s original optimistic outlook appears to have been founded on an overall view that the global economy would recover quickly, a view that is swiftly changing as many fear another dip into recession, particularly with the debt crisis in Europe. This negative outlook has likely had a strong impact on Cisco’s forecast, resulting in its far more modest growth expectations.

Cisco has also had some problems of its own to work out over recent months. In July it announed that it would axe as many as 15 per cent of its workforce, or 11,500 people, in addition to selling a Mexican set-top box factory to Foxconn. It also abandoned its Flip video camera business, with the loss of 550 jobs.

In April the company’s CEO, John Chambers publicly acknowledged that Cisco had lost its way, with fiscal third quarter profit down a massive 18 per cent. He called for a refocusing on areas in which the company is highly successful, such as networking, servers and cloud provisioning.

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Cisco And HP At Odds Over Catalyst 6500

It appears that HP is calling Cisco out on its advertisement that it’s new improved Catalyst 6500 switch is better than anything HP has to offer. As many IT professionals already know Cisco finally introduced the long-awaited upgrade to the very popular Catalyst 6500. The new Catalyst it equipped with Cisco’s Supervisor Engine 2T, a 2-terabit card which can manage 80 Gbps and triples the 6500′s throughput from 720 Gbps to 2Tbps and quadruples the number of devices that can connect to the network. These stats are based on literature from Cisco’s point of view. Cisco also states that an upgrade to Supervisor 2T on existing Catalyst switches would cost customers around $38,000. However, Cisco is saying if you went the same upgrade path with a comparable HP switch architecture; it would cost the customer more than $100,000 and would only give the customer 720 Gbps of throughput.

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Cisco To Cut Thousands Of Jobs

Word the street is that router giant Cisco is about to cut 14 percent of it’s worldwide workforce which is thought to be around ten thousand people.

The reports are saying that seven thousand people will be given pink slips by the end of August; and the other three thousand unfortunate souls will take an early retirement option.

It seems as though many companies go this route when the executive team does not adjust to the changing technology market; they try to boost profits in the short-term by firing those who have worked so hard for the company. That said, the massive cuts are expected to save Cisco about $1 billion in 2012. A company spokesperson told Bloomberg that additional cost cutting procedures will also be instituted.

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