Cisco plans to carry out large-scale layoffs in the South Bay area. Specifically, Cisco in San Jose will cut 227 jobs and Cisco in Milpitas will cut 123 jobs. According to the official announcement, the layoffs are part of the company's restructuring and streamlining operations and will take effect on October 16!
Cisco's announcement of massive layoffs in the South Bay region makes people wonder, what is the problem with the once-network equipment giant?
Founded in 1984, Cisco is a leading global provider of networking equipment and solutions. The company's products include routers, switches, security equipment, video equipment, etc., which are widely used in enterprises, governments and operators. As one of the two giants in the global network equipment field, Cisco's competition with Huawei began in 2002. However, over time, Cisco's market position gradually declined.
First, Cisco's business was too broad, resulting in inefficient operations. Cisco's products cover a variety of areas, including networking, security, video, collaboration, and more. Products in these areas are not completely related and therefore require different R&D and sales teams, which increases the cost and management difficulty of the company. In addition, Cisco continues to acquire other companies, making the company's business more extensive. Although these acquisitions can help the company expand its business, they also increase the difficulty and risk of the company's management.
Second, Cisco's product line is relatively aging. As technology continues to advance, the market for network equipment is constantly changing. However, Cisco's product line is relatively aging and cannot meet the needs of the market. In addition, the relatively high price of Cisco's products has also led to a decline in market share.
In the end, Cisco lost its edge over the competition. Since Cisco "intervened" in Huawei's patent infringement issue, the two sides have been in competition for up to 10 years. This competition is not only a competition for technology and market share, but also a political and economic competition between the two countries. In this competition, Huawei has gradually caught up with Cisco with its independent research and development capabilities and price advantages. In addition, Cisco's management also had problems, resulting in inefficient decision-making. Last November, for example, Cisco announced a 5% layoff (about 4,000 people), but this decision was considered too conservative and failed to improve the company's financial position.
To sum up, the problems encountered by Cisco are not only a single market problem, but also the company's own problems. Companies need to re-examine their business scope, cut unnecessary business, and strengthen R&D and sales of core businesses. In addition, companies need to optimize management and improve decision-making efficiency. Only then will Cisco be able to get back on its feet and regain its place in the network equipment market.