Let's just say the average salary is 70k which is very conservative. That is 14k * 70k annually lost from the local community, a grand total of 980M or let's just say 1 billion annually.
Looking for another job when there are massive cuts like this also degrades the salary they accept on their next job because of the competition.
I wish companies, if possible, throttled layoffs a bit more instead of large chunks like this, but that is unlikely as the board/CEOs are looking for a stock uptick when they do and don't want to drag it out to affect the market value (translation: their own pay / stock value/price).
We rarely look at the amount of money lost in communities when things like this happen but it would be nice if reporters put out the lost community dollars/salaries along with the layoff number. The Great Wage Stagnation continues in our consumer driven economy.
I've been through throttled layoffs in the past. They're much much worse.
1) You're always looking over your shoulder, and can't think about long term projects or work.
2) The first people out (frequently the weakest performers) are able to find jobs the easiest, but by the time the better employees are also let go, the market demand has been filled.
3) It encourages and environment of non-cooperation. Employees cooperate more when they think they'll see each other again. If it's "there's 3 of us here today, and probably only 2 in a few months" then there are multiple incentives to not compete.
Better to get it over with all at once wherever possible. Companies that need multiple rounds are usually either mis-run or in markets deteriorating extremely rapidly.
I agree, its like being stuck in purgatory. Although, I disagree somewhat with your last statement -- in my experience, all throttled layoffs have been a result of acquisition synergies. The current one around me is by a market leader with a great past and excellent vision of the future.
From my experience there's an easy way out of this: take control of your own career. Ask yourself: are these the conditions I want to work in? whats best for me; family; situation? Are there opportunities here while everyone else is looking over their shoulder?
But when layoffs are as big as 14k, rarely are employees evaluated for individual value...it's usually entire business units or office locations that are closed. Throttled or not, the people exiting Cisco have likely already been picked...not much they can do about it in the meantime.
20% is a very high number, especially given how many layoffs Cisco has had. I've been in situations where 10% got laid off, and there were still weak performers who could be let go. This usually happens in cultures where it is very hard to fire people, so they use layoffs to cover for weak performance management. (And weak performance management can be a cause to need the layoffs to begin with)
Serial acquirers almost always are in throttled layoff mode. It's how they justify the acquisitions. Companies that have been passed by the market (think IBM) tend to cut gradually over time. Occasionally you have companies where both have happened. (Think your phone or cable company)
> wish companies, if possible, throttled layoffs a bit more
The uncertainty will cause a lot of stress. As a red badge at Cisco some years back, layoff talks used to cause me serious anxiety, even though my parent company would just move me to another project.
The bigger problem with Cisco is that people speculate about layoffs and there are continual leaks. This really upsets employees, and causes considerable emotional pain for them.
To add to this point often stronger employees will exit when this ongoing pain is happening. No-one likes the uncertainty but your best guys can move the fastest. And general morale.
Redundancies are absolutely best done as one-and-done.
Also, would this be a record number of staff laid off in one go 'by choice'? 14,000 is huge. Poor guys.
Yep, happened at my last job. I survived several rounds or layoffs, each with my manager reassuring me that my job wasn't being targetted. Even so, each time a few of our best people would find something elsewhere, even if their position wasn't being eliminated and they ended up filling it. Then my manager left the company which was my first warning sign, some people started finding positions in different areas of the business...then I heard rumors and ambigious announcements again. Me and several of our best people left shortly before hearing that our entire department would be transitioned to a contract position with an outsourced provider, which made replacing our positions that much harder. It wasn't quite a layoff but would mean we'd no longer be full time employees with all the benefits that entails and the contractor could basically do what they wanted with us after a certain amount of time. For those that stayed, I heard its not been great.
As someone who made the mistake in working for an international office, and caught the train out almost 10 years ago now, I agree. I escaped one set of layoffs and then kept thinking I'm next.
I was next.
Got fired at end of financial year, along with a couple thousand others. Had a new job before the day was out (another result of said anxiety).
Am I missing something? They are the exact same thing. The company decides to terminate your employment contract, as opposed to you making the decision.
"For cause" usually means something much worse than "poor performance". That term is generally harassment, fraud/embezzling, other illegal acts, gross insubordination, etc.
Being fired because you are performing poorly in your job is, crazily enough, not "fired for cause" but simply "fired".
Being fired "for cause" usually makes one ineligible for unemployment income.
Thanks. I used the "for cause" a little sloppily. A sales person who misses quota will still be able to get unemployment benefits, while another salesperson who likes to walk around the office without pants will probably not.
Additionally, being laid off usually results in at least a respectable severance package. Being fired generally means you only get the minimum legally owed to you.
Being one of 14,000 employees let go because they chose to eliminate that entire half of the company doesn't necessarily mean anything. Being one of four engineers chosen to be let go from a team of 20 can say something about your skill level.
The practical difference is the ability to collect unemployment benefits. If you're fired you may not be able to collect benefits depending on the situation and state where you live.
> I wish companies, if possible, throttled layoffs a bit more instead of large chunks like this, but that is unlikely as the board/CEOs are looking for a stock uptick when they do and don't want to drag it out to affect the market value (translation: their own pay / stock value/price).
Have you ever actually been part of a company that did layoffs in chunks like you're suggesting? Experiencing that type of protracted wave of layoffs is not fun at all. In fact, it was down right miserable. Going to work each day with the threat of layoff looming over your head is an incredibly stressful experience.
You might consider that there is more at play than just a few executives getting greedy about dollars.
I was in the first round of layoffs a couple years back and it was so nice. I got severance when their guilt to cash ratio is still high, no survivor's guilt, didnt have to worry about how to keep everything running with fewer backup people and a few missing experts, and I didn't have to worry about which round I would be in, or who else they would let go who made the job bearable.
It's kind of strange that massive layoffs like these result in a stock uptick. At least for me it's a sign that the company is probably unhealthy and that its value is going to go down in the future.
It mostly just confirms my belief that fully half of all white-collar workers in the developed world are adding zero value. They hustle for their first few years, then coast as old products sell themselves to old customers they already established relationships with in their younger years...
I can't fault them for not giving their all every day... I know for a fact I would instantly put in the minimal amount of work required after achieving tenure / seniority / whatever at a large organization.
"It mostly just confirms my belief that fully half of all white-collar workers in the developed world are adding zero value. They hustle for their first few years, then coast as old products sell themselves to old customers they already established relationships with in their younger years..."
This is not necessarily true.
It's more like - as you add people to the pile, you get diminishing marginal returns on value-added for each person yo add.
Trust me - older products that are hardened, and sold through established channels - those are where the juicy profits come from! Nobody wants to mess with that!
"It's kind of strange that massive layoffs like these result in a stock uptick"
It means that the company has realized it's in a head-wind, and is cutting costs in order to deal with it. Layoffs are usually coincident with a re-structuring.
Ergo - layoffs mean 'the company is adjusting to new market realities' - which is what investors want to hear.
Layoffs usually happen after the 'crappy state' of a company has been priced into the stock ... so there's usually only upside.
Also - all things considered, a layoff simply means less cost and likely an uptick in profitability, which in a spreadsheet analysis gives a higher valuation.
Cisco is doing a major layoff because they have a new CEO who wants to wipe the board clean and start his term fresh. This is very cynical ... but often true.
Finally - some companies do layoffs long before they are truly necessary. It's 'house cleaning' for them. Cisco does this. Because Cisco is an otherwise strong company, a layoff is good.
This is not like a 'Yahoo layoff' wherein it's just sending people off a sinking ship. So - an otherwise 'strong' company doing kind of a 'ruthless' layoff is usually seen as a good thing in investors eyes.
Maybe the logic is that market is already aware that the company is not in good shape and this is reflected in the stock price. Massive layoffs tell the management is now also realising this and doing something about it, which is then thought to be a good thing.
Another explanation could be that massive layoffs has caused stock uptick in the past and therefore it makes sense to bet that the same thing will also happen this time. (Of course this only makes sense for those who are first to react to the news)
I imagine the logic is fairly simple: Same business, same products, less overhead. This should drive up profits in the short term, and if operations continue as they were previously, in the long term too. They also get to use terms like 'lean' and 'streamlined' in their investor reports. Stock bump.
I understand this isn't a good situation for the community, but what about the other side? That $980m isn't just disappearing into thin air.
CSCO will use it to refocus their efforts into more valuable services, which by itself will entail some level of hiring & investment, and if successful, they'll hire & invest more.
If you think this is an optimistic perspective, consider the alternative...CSCO continues employing people who aren't optimally productive for its goals, and ultimately the whole company runs into the ground and EVERYONE needs new jobs.
Layoffs are an unappealing and emotionally-charged but necessary part of the corporate lifecycle.
Will they? Or will they use to just do more buybacks? I'm not sure I trust any company to refocus after layoffs when they practically just announced a huge temporary gift to shareholders.
Good point. But even buybacks are taking that cash somewhere...it's the market's way of reallocating capital to a place it can be more productive.
It's hard to picture, since that cash is going from one entity (CSCO) to a lot of different entities (the market), but obviously CSCO thinks the market can make better use of that capital than it can.
The only thing that could be worse than what they're doing, in my view, is if they fired all these people and sat on their cash, AAPL-style.
It's unlikely they're going to hire on anywhere near the same number they layoff. Laying off a large swath of employees, only to have to go through a major hiring cycle is extremely inefficient. Finding the right employees is time consuming and expensive.
It seems more likely they'll keep the savings as a quick fix to make them look better to investors. As noted in the article, these rumors are coming out close to announcing their fourth-quarter results.
Not that it necessarily hurts your point, but your numbers are likely way off. The article doesn't say where the layoffs are coming from other than moving from hardware to software. I expect this means that they're firing some designers and largely manufacturing people, meaning the community most hit would be in Asia more than likely. Salaries there are a lot lower, so it wouldn't be as much of a gain for Cisco (though still the same kind of effect for the community effected). They also are probably shuttering some production facilities, which could save them a ton in capital costs, but again, could have a strong negative impact on the communities those buildings are in, depending on if someone else snaps them up.
Can money really "get lost"? I would think a dollar that otherwise would have been paid via salary to one of these 14k now goes some other way. Somebody else gets it. Somebody else can spend it.
And they keep that money in their pocket, do they?
On a personal level, this sucks for those Cisco employees. But it's weird that the land of disruption advocates "wasting" money on unneeded labour. There isn't much sympathy for the taxi drivers Uber is harming.
So I own stock in most large companies through index funds. I want to someday retire and the government won't/ can't provide for me to life up to my standards. No offshore tax haven here.
His case is in fact the majority, the radical majority. You couldn't be more wrong about how US investors store their wealth, it's almost entirely located within the United States, which is proven by estimates on domestic held wealth by the major banks, the Fed, and the Treasury. If you have something to dispute them with, let's hear it.
Americans almost never use off-shore tax havens, because the IRS has no boundaries on chasing them down. US income is taxed globally, and the IRS will destroy you if you attempt to hide it from them and they find out, which they almost always do (they have direct or indirect access to nearly all global banking, financial transactions, stock transactions, bond purchases; they can also directly or indirectly get access to nearly all banks accounts in first world nations through treaties). There are very few countries where you can even attempt to hide your money from the IRS now, and most of those you'd be a fool to park money in.
I think the % of Americans doing the off-shore thing is very very low.
Now from a raw $$$ standpoint, perhaps it is a problem. Is 10% of wealth hidden offshore by the .1% of abusers? Or is it only 5% I doubt anyone knows for sure. I suspect it is less than the "legally" held offshore money using the double irish and other such accounting tricks.
I guess that depends on what you consider often. Because the money outside of tax-havens "doing work"in the economy is vastly greater than money hidden in tax-havens.
Bad comparison. Taxi drivers losing business to Uber can easily go to work for Uber themselves (in fact, many of them have done exactly that). Someone being laid off by a company like Cisco can't just go work for the competition that easily; it wasn't a simple situation of a better competitor coming along that caused these Cisco employees to lose their jobs. If anything, it's because the work was outsourced offshore, and these employees can't easily chase their jobs to China.
>Bad comparison. Taxi drivers losing business to Uber can easily go to work for Uber themselves.
The lower barrier to entry of Uber means that there are more people competing for those taxi jobs, like people who can do it part-time. How many taxi-drivers did you know pre-Uber? I knew zero. Now I know multiple people who are, basically, taxi-drivers. (I'm making no claim as to whether this development is good or bad, it just is).
So yeah, they can "easily go work for Uber" as a contractor for less money. I imagine that the Cisco workers could do the same if they wanted to be contractors for less money.
Not quite so clear. This is a layoff of 14,000 hardware or low-level networking systems engineers [1], not 14,000 front-end developers, it is not so obvious to me that the current Silicon Valley market is ready to absorb them so easily.
Interesting to think those were the kind of jobs, and CISCO the kind of company, that once gave Silicon Valley its name. Makes you wonder how the market for software engineers, even adaptable always-learning hack-through-the-night-for-fun engineers, might look in 20 or 30 years.
[1] Read "(low-level networking systems) engineers", not "low-level (networking systems engineers )"
I agree but they have a guaranteed job if they retrain. These are relatively smart and educated people. Retraining shouldn't be the end of the world.
In my profession (banking), staff levels have been going pretty much consistently down since the financial crisis, as banks shrink or retreat from certain activities. But these are mostly bright, educated, business savvy people, who end up doing something else. For many it is a blessing in disguise, an opportunity (albeit in a brutal way) to move away from a shrinking industry to become their own boss or to work on the next big thing.
I always wonder what happens to those software engineers, the "hack through the night" sort of guys. They must eventually burn out, or get replaced by the younger developers who are onto the next "hack through the night" project.
There must reach a stage in development where you're considered "too old" (sadly) or haven't kept up with the latest and greatest in trends.
What do you do then?? Project manage? Do all developers move into project management?
I see this mildly where I work where older developers are greatly valued (they're good!) but haven't kept up to date, eg. a lot of C++ is here, but nobody here (and I mean nobody) has any understanding of C++11, C++14 changes and are stuck in the C++98 ways. They even call C++11 "C++0x" still. This is different to the "learn the next fad" approach, as C++98/2003 deserve to go away.
I work with a guy like this. His knowledge base is vast (we're electrical engineers and he's a master of both hardware and software). He's also a shambling zombie from a lifetime of hacking through the night. I'm not exaggerating. He mostly just shuffles through his days, trying to get anything done, but he's just too fried. He rarely sleeps. I've never seen him eat. He won't take vacation days. He seems to have decided a long time ago to just drive himself insane. Honestly, I think if he weren't one of the guys the company can't afford to lose because he knows things about our products no one else in the building does, they'd probably let him go.
There is a difference between not knowing the latest and greatest, and not keeping yourself updated with the evolution of your tool of choice. Most people will do the former after a while. It's too much time spend with too little gain. The latter however is not acceptable. I want my developers to know about the latest version of .net, and if they're not using linq they're doing it wrong.
Indeed. Pioneers are the people with arrows in their backs. For a stable system it's reasonable to wait before adopting change; especially if large areas of the existing system are built with a previous technology. Moving to new changes results in internal inconsistency, and possibly problems at the boundaries.
I never stated all evolution should be followed blindly. But once the evolution becomes established as best practice, there is very few reasons to not do it.
But 8y ago WCF was marketed by Microsoft as the future of web services. It was clear to me from the outset that it was a mightmare to configure and unecessary complex. Now I think it is the generally accepted view. But if we have to wait 8 years for each new technology...
This is a personality thing I think. Some people do want to just stick with what they know by the time they are 25 and would rather be unemployed or in management than learn something new. I'm 45. I've worked in video games for my entire working life. Yet throughout that time I've shifted roles drastically every 5-10 years. This keeps things fresh and it lets me stay employed and in demand without having to become a hands-off manager or sit in the corner working on legacy code.
I know I'm cynical, but from what I've seen, the massive skill shortage is specifically for young, early career software developers willing to work for somewhat subpar wages. A 45 year old embedded systems manager would have a much harder time finding a new job.
Not really. Depends on how many years they have stayed with Cisco and how old they are. If majority of the layoffs are senior people, they might find it is not that easy to find a good position out there. Those big firms are like walled garden, they made their own wheels, and outside world has moved on since way too long ago.
> When you amputate a limb, you want to do it as quickly as possible.
When you throw the bathwater out, make sure you aren't loosing valuable resources.
the best case scenario is to be really smart and constantly drain the bathwater such that the baby doesn't even notice the level dropping. Keeping the baby focused on the new shiny thing helps.
Bathwater doesn't have morale. I worked at a semiconductor company while in school and for a bit after graduating. It's a volatile industry and layoffs are frequent. Every time anything happened, people were just concerned about layoffs. On every project, people's concern was usually protecting themselves so they wouldn't get laid off. None of them were really happy in their jobs, but they all had golden handcuffs (I'm in a small state with little high-paying tech work). I can assure you that the effects of roughly annual layoffs (similar to the throttling you describe) is one where people can never get comfortable again, and what should be a rare, isolated event, becomes the status quo. A bad status quo.
Why not detail this smarter way? I don't see how you get around choosing between 1.) all at once, do it almost never or 2.) Semi-regularly, but in smaller batches.
It's the act of introducing the periodicity that damages morale so much.
I work at a place where we surgically remove deadwood, keep valuable people & tech. Those who have value feel valued.
As an aside I was with 3Com when they tried to go toe to toe with Cisco. 3Com did very much the same thing.. one major event was even called 'Catapult', senior management's intent was to launch the company forward, workers looked on with incredulity as over half the workforce lost their job in one day. 3Com never recovered.
Dam straight, nothing wrong with coolaid if it's good for you. Mid sized company(~3K), 30 years old, well above market pay, stellar benefits, 10-30% bonuses and a very family friendly culture. I don't blame them if they want to keep what works, people are smart enough to smell bs coolaid.
There's never 'layoffs' and never ever entire groups let go. Just regular PIPs for people who you think... 'no great loss'
I definitely disagree, from the perspective of remaining employees morale. Doing a slow-drip of layoffs is the worst for employees because you basically have to constantly worry if you'll have a job in a few months.
> ...as the company transition from its hardware roots into a software-centric organization.
With all these companies exiting the hardware space, who is going to be doing the hardware?
Will hardware remain a niche department within these software based companies? Are off-the-shelf systems-on-a-chip now powerful enough that there is now no need for hardware, beyond a generic universal SoC based device? Is it going to be an unserviced niche for new players to move into?
To use the specific example of Cisco: what hardware are Cisco planning to have their software running on in (for example) 5 years time?
The software will run on inexpensive dumb hardware from whitelabel manufacturers such as Quanta computers. The secret sauce in hardware that gave Cisco big margins is increasingly replaced by software that is good enough (e.g. You can use SDN controller and a cheap switch hardware to replace very expensive Cisco stuff). The trend in Enterprises and telcos is to use cloud (AWS, GCE, Azure,...) and open source (aka Facebook Open Compute) so the hardware spending has slowed down. (in tier 1 carrier I deal with, all new deployments must be on Openstack that uses whitelabel hardware purchased in bulk). EMC, Oracle, Cisco, HP are facing the impacts of such decisions.
White box switches are all great in the data center if we are talking about a shitload of layer 2 and TRILL, but somebody still has to manufacture the core routers capable of advanced IP layer 3 features at line rate 400-1000Gbps bus backplane per slot. You're not going to whitebox replace an ASR9010 with 3rd generation line cards.
It's a much smaller market than the old "everything with more than one network port should be Cisco" mantra, though. Yeah, Cisco won't disappear any time soon, but their market is shrinking.
And they won't be trusted or used by large carriers for serious POPs for many years. New manufacturers have tried to show up on the market and sell routers that are designed to be highly redundant and offer a full suite of layer 3 feature set to handle full global v6/v6 routing tables. They've either failed or been acquired.
Major ISP backbones are very risk averse, when you're trying to run a six nines availability IP services POP. The routing software needs to be rock solid and mature when you're looking at a twin pair of core routers in a node that might be handling 200-300 Gbps of traffic and critical edge peering/transit connections.
My counterargument is that Tomahawk LC (the third generation LCs referenced by parent) are just NP5 and Mellanox just picked up EzChip. I imagine you'll see whitebox competitors targeting large swaths that use ASR9K for the datapath resources it provides (perhaps Mellanox will even build this box).
Others, such as in my particular space, were previously forced to ASR9K or similar for scale reasons (because scaling full tables is hard when you need capacity too), but Broadcom's Jericho chips hit the scale mark with added TCAM, kicking us from $200K-ish/PoP for barely meeting needs to $60K/PoP way over provisioned in the case of NCS5501 or Arista 7280R. Of course, there are caveats to how this works out, but good enough is good enough!
Customer mix is important for margins. SPs, for example, are notorious for getting bottom dollar deals for their scale and ability to play the other side. And sure, they need the feature set of ASR9K. But when the rest of the mix (higher margin) looks around, they see that the scale promises are unnecessary for their operations and move on to lower cost boxes.
Substitute Python for bash and I get the same sense from Kubernetes.. I'm not sure it's fair to say "before the problem is well understood... But maybe. Whatever Google had going on internally Kubernetes is very much figuring it out along the way at almost every level. If you are wanting to use on AWS then you have kops, kube-up, hyperkube, protokube; a dizzying, un-approachable and interconnected ecosystem of launch scripts/programs. Very strange interop decisions with AWS, but hard to fault because it's darn near one person trying to manage all AWS integrations.
AWS, Azure or GCE....or if you insist on your own hw, just what spit and bailing wire you minimally require... at least you will own and understand it.
What's good about it? It's a bunch of different dumpster fires created by a bunch of committees across a bunch of companies which mostly compete with each other, and as such have no real incentive or motivation to have it all work well together even if they had the ability to, and the ability alone is seriously in question.
I tried to use OpenStack 4 years in our new PaaS product. I ended up pulling it and using the regular, well baked tools built into our managed hardware. I see much hasn't changed in those intervening years.
OpenStack is open source. It can be forked, modified, whatever. Let me know when you manage to build your own AWS cloud with Amazon's software and then I'll entertain the thought that they are comparable.
The networking field, as with the server hardware field, is seeing a movement towards commodity hardware. Custom network silicon is expensive to develop, and no longer is returning the investment that it did. This is cause companies like Juniper and Cisco to look at ways to expand their profits, while essentially making nothing on the hardware.
Cisco along with others are looking by at things like licensing the IOS to run on any device. So a company could buy 50 white box switches and slap IOS or JUNOS on them.
In the networking world OSs are even more religious then the Microsoft Linux debates of the past. I know networking shops that will never buy anything but Cisco because they only know how to network on Cisco and they refuse to learn anything else. That is the market that Cisco is going to target.
> Cisco along with others are looking by at things like licensing the IOS to run on any device.
ios is a custom-rtos for a custom machine (running on mips mostly). it runs control plane for your routers/switches etc. why would you want to run it on a non-csco/vanilla x86 boxes ? unless you can _somehow_ make control-plane h/w agnostic (easier said than done) i don't really see much value in doing this.
You may not. But large enterprises that pay billions a year for networking gear, who can save a billion by buying whitebox, and still get that Cisco feel that they have spent years training and acquiring expertise will and already are. It may not be IOS. But Cisco will come out with something that feels and operates like IOS that runs on x86. Juniper has already ported it's JUNOS to run on x86.
Between whitebox and SDN. These companies won't be selling hardware for the 1-200% markup the have enjoyed all these years.
> Juniper has already ported it's JUNOS to run on x86.
huh :) i was/am under the impression that with junos, juniper started with freebsd as the core, and then added lot's of stuff to it, specifically in control-plane and a bunch of kernel extensions as well.
if that is true, they were already x86 compatible...
with cisco things are very different. i don't think ios ever ran on a bare-metal x86. this is not for the lack of trying though (if you know folks who have worked on ios, check with them, writing about it here, doesn't seem right)
Junos has run on x86 for years - Juniper had i686 control planes in some devices. As well as PPC and a few different kinds of MIPS (Octeon, XLR) - although those are usually data plane.
Newer products use virtualization, i.e. running the FreeBSD-based Junos control plane in a VM.
The very first juniper ever was basically a freebsd box glued to a bunch of custom ASIC and line cards. The m40. It has always been x86 and now x86-64.
Not much difference I'm afraid. IOS-XE is essentially the product of porting the classic IOS and runs it as a controlling process that sits top of linux, and with dedicated forwarding path.
If you look up for IOU, which stands for IOs over Unix, it has been around for quit a long time.
I've seen some older Cisco storage switches which utilised Pentium 4 CPUs and SAN-OS instead of the usual custom built Motorola processors for the non-ASIC components of the device.
>. why would you want to run it on a non-csco/vanilla x86 boxes ?
AWS, for instance, with the CRS1000V. Though, I think that is IOS-XE and Linux based. IIRC, they are moving to IOS-XE/XR which is more Linux based and can be run on COTS boxes.
|> With all these companies exiting the hardware space, who is going to be doing the hardware?
The manufacturers that have been actually making the hardware for the last 15 or more years, that's who. The only difference in many cases is the color and brand on the case.
I expect eventually margins on hardware will come up and new players will enter. Maybe not, but the siren song of software's high margins and flexibility is only going to last so long. Innovation in hardware is going to slow down a lot, and software people are going to have to start worrying about efficiency again, and will no longer be as able to shrug optimization off onto Moore's Law or abstract away the hardware altogether. Some people will come in with new hardware, offering to alleviate those pains, and we'll have a healthy hardware market again.
Edge Core builds something like 70% of all big names switches. You can buy an Edge-Core branded switch for a fraction of the price of a Cisco one, and run various OSes on it, mostly Linux-based (Pica8, Cumulus...). You can also run nmap, tcpdump, or whatever you want on it... Once you've tried it you won't look back :)
> With all these companies exiting the hardware space, who is going to be doing the hardware?
There's a ton of smaller players ready to jump in. They're not household names, but they have the expertise to fill the gap. I wouldn't worry about it. Ubiquiti, Mikrotik, etc
> They're not household names, but they have the expertise to fill the gap. I wouldn't worry about it. Ubiquiti, Mikrotik, etc
These companies have nothing to do with the businesses that make Cisco its real money.
Growth in compute is from the cloud companies. They can purchase switches from ODMs like Edge-Core, Quanta, and Celestica directly. At the end of the day, because switching has largely converged on the same merchant silicon (Broadcom Trident/Tomahawk now, perhaps Barefoot Tofino in the future), they end up with a similar product at a lower price point. Either these companies are big enough that they have their own switch operating systems or they license one.
It's simply a different world than a few years ago.
I live down the street from Cisco HQ. I share an apartment building with many of their engineers. Perhaps it is anecdotal, and my evidence comes purely from speaking with them (I have never seen their work), but they come across as absolutely terrible as software engineers. They seem like the kind of company destroying people that are the death knell of every software giant. They have no care for the product, good programming, or their company. Their main goal is to just have a job and fly under the radar.
I have looked at Android code. It is awful. Now, I don't form opinions about Google engineers based just on that code.
I meant to say, generalizations don't always work well. They may have bad engineers. But they have great engineers too. Kent Dybvig and his team who wrote Chez Scheme works for Cisco. There are many others. Jonathan Rosenberg who wrote many Internet RFCs on fundamental protocols that run the Internet voice/video works for Cisco.
You just have to look at the API. From little details (wifiInfo.getSSID() returning either the quoted SSID, an unquoted string of hex characters the SSID consists of, the special string "<unknown ssid>" or "0x") to the overall architecture (needlessly convoluted lifecycle, 2D rendering architecture from 2000s, the whole intra-app Intent bullshit that causes people to find alternative ways of communicating between Activities within the same app ...)
For inter-app communication Intents are a pretty reasonable solution to a complex problem. But inside an app, I would just love to have constructor parameters for my activities. I make do with Intents, but I don't have type safety, I have to deal with partially constucted objects until I've read my Intent Parameters and any time I have to pass something that's not in the default types that a bundle can contain I have to build a Parcelable wrapper for it, or find some other convoluted solution. Overall I just feel like I'm working at the wrong level of abstraction.
I didn't say it is commendable work. SIP is what we have at the moment as a standard and is being used by a lot of products out there and it was written by a Cisco employee. That is all I said. I am not intimately familiar with SIP to comment on its pros and cons.
I'm sure they have some good engineers. However, I will say that friends who work there currently and those who have worked there in the past constantly raved about how little they actually have to work and how empty the office is on Fridays among other aspects that give the impression that much isn't expected from their engineers.
When you buy practically any competitor and control the margins like Cisco was able to do for so many years that turned massive profits there isn't really much expected from the employees I'd wager.
> those who have worked there in the past constantly raved about how little they actually have to work and how empty the office is on Fridays among other aspects that give the impression that much isn't expected from their engineers.
Cisco is a huge place and this varies by person/team/BU. Fridays a lot of people work from home.
I never understand the animosity shown towards people who choose to work from home. Nothing personal, but I see attitudes like yours in a few of my scoffing coworkers as well.
Do you really know what your teammates are accomplishing? Or how they are spending their workday? Do you go to their homes and peer inside the window? Or is it just some sense of self righteousness you feel by being a good employee who wouldn't ever choose to work from home like those other lazy bums.
> Or is it just some sense of self righteousness you feel by being a good employee who wouldn't ever choose to work from home like those other lazy bums.
Wow, I must have touched a nerve. Actually, I semi-regularly work from home. My issue is with the people in my organization who take advantage of working from home, treat it like a three-day weekend, and will likely cause the work-from-home privilege to be revoked.
My experience is similar to freyr's. I've had Friday-from-home periods where usually I'd end up not doing much. Sometimes this was my fault; it's just too easy to see it as an early start tothe weekend. But at other times it was because people/code/decisions I needed were not made because employees in the office also seemed to have much lower output on Fridays.
And my experience with coworkers is no different. I actually checked commit histories at some point to confirm that indeed most of those who worked from home on Fridays didn't produce any significant output. The sneakier ones would commit stuff, but clearly 'little stuff' that I sometimes suspected they had ready on a Thursday specifically to show something on a Friday.
Of course, you're completely correct that this doesn't mean that this is always the case. But if I were an employer, based on my experiences, I'd be hesitant to allow people to work from home on Fridays. Not in general, but specifically only on Fridays.
The margins in particular are something I cannot understand from Cisco.
Technology in general comes down in pricing. I'm constantly amazed at the vendors that introduce newer, more powerful product lines, with a reduced price tag from anything previously seen.
Cisco here, are a huge outlier. Despite HPE and Juniper creeping much more competitive options into their enterprise space, twice or so times a year we get alerts from Cisco about "across the board" price increases.
If you have ever had the misfortune to use a software product from Cisco this is no surprise. At least you don't have to suffer through any single product for long because every couple of years they are guaranteed to abandon it and replace it with another system with horrible performance, more bugs than Joe's Apartment (I may be showing my age with that reference.) and no high availability or recovery solution.
I remember working on their Call Manager system. A Windows application that used embedded Crystal Reports to load a single XML file with a query in it, where the rest of the work was done in large and lengthy Informix stored procedures. So you could add your own by writing your own SP and modifying the XML on the client side.
Mixed feelings.
Also, if you asked Informix for the time, it gave you the system time but somehow the Cisco DB tables always logged call times with daylight saving, so you got time mismatches by an hour. Call Manager must not have used the same "ask Informix what the time is" function that I used...
Fond memories, sort of. Trying to debug on an Informix instance the other side of the world with giant nested SPs failing with unhelpful error messages, what fun!
That's the impression I got talking to a friend, who worked at CISCO India, couple of years back. Their C++ code was dreadful thanks to some upkeep by 'engineers' from 'premier' colleges who made a living adding more conditions to existing if blocks.
Some people choose a career just because it's something they can do, and make good money doing it. I don't think there's anything inherently wrong with that. Until you have to work with their crappy code I guess
Welcome to the disconnect between business and life. Most businesses are operated with profit as its only real goal. Everything else is just marketing talk. Companies are run by specialists in business - i.e. people whose occupation is turning money into more money in whatever way, regardless of the money source (hopefully within the bounds of law). Product quality is only one of the many factors in making money, and is worked on only as long as it boost sales. The moment the company can sell a crappier product for the same price, they'll do so.
A lot of resentment between developers[0] and managers comes from not understanding that. Management does not care about your engineering concerns as long as they don't meaningfully impact sales[1]. Hell, even if they do, they can often paper over technical problems with marketing cheaper than it would take you to fix it. If they got a confidential memo that the whole country is going to have a sudden diarrhea epidemic, they'd happily sell the product, fire your team and buy a toilet paper factory instead.
--
[0] - those who haven't already been brainwashed into thinking in business terms first, i.e. into professionals.
[1] - sometimes it doesn't matter even if it impact sales, as long as it does so on a longer term than manager's expected involvement with this particular project.
You appear to have very little respect for your neighbours inspite of not having any real insight or experience with their work.
It would be impossible to come across as 'absolutely terrible software engineers' just from a conversation without prexisting prejudice.
Its not just Cisco but for a large majority of folks a job is a part of their life not their entire life and it doesn't automatically follow that they are not good or passionate about their jobs, and it's sad that anyone would choose to reach this conclusion just from speaking to folks.
It absolutely is. We were talking about C++ pointers. 15 minutes of casual discussion at a hot tub a few months back comes to mind - and I could tell they had no idea of:
What a factory was.
What a unique_ptr did.
The dangers of unclear object ownership in a manually memory managed program.
Difference between when to pass by reference and when to pass by pointer.
Or more possibly that they simply had no interest in discussing "shop" on a weekend or outside of work hours. Or perhaps they were preoccupied with other things being that they weren't at work. Seems quite a stretch and kind of unfair to proclaim how horrible they and Cisco as a company are based on this.
I heard from a colleague that John Chambers walked into one of the Cisco buildings and found that it was mostly empty due to people taking advantage of Cisco's lax policy on working from home. The buildings are now planning to get sold because they no longer need them. Either these employees that were assigned to work in those buildings are gonna get laid off with this 14K figure, or they're gonna be working from home.
I have also found that people get a lot less work done if they're working from home.
Depends on who you are. Some people say they are going to work from home and just use it as an excuse to do nothing. I'm incredibly more productive when I wfh. Not than I'm unproductive in an office environment, just more productive when I'm in my basement hacking away.
I think its completely off base to conflate "they" the handful of people that live in your building that you have spoken to with "they" an entire company that consists of tens of thousands of people.
I admitted to it being anecdotal and coming purely from limited interaction, and not seeing their work. I think that is enough preface to be the salt with which my opinion should be taken.
> There is a big delta between being fired and being downsized
I think you originally meant to say "laid off" versus "downsized" as downsized isn't related to the individual employee but to the company has a whole. Still though except for some background check by a government job or unemployment benefits I see little difference between being fired and laid off. Sure there are some differences but I wouldn't call it a big delta at all.
Furthermore, you can be fired and still collect unemployment. For an individual employee, there is little difference in actual outcome between the two.
I don't think any past or present employees are surprised by this. Cisco has always been a volatile place to work (at least since the dot com bubble) where these layoff rumors start every 4-6 months; and more often than not they do occur.
This kind of uncertainty is unsettling to any employee (good and bad performers). It's prudent for existing employees to look for employment elsewhere since this uncertainty has been going on for over a decade now. If that means gaining additional skills, networking (no pun intended) etc. so be it.
I will say that I wish F5 were less of a substitute for reliable applications where I work. If we had gold, horizontally scalable apps we wouldn't need to Bork with routing so much.
Interesting. I live in the south bay right next to the Cisco campus, and the amount of new employees they are hiring is staggering. I wonder how many of the 14,000 are being rehired as a contractor or something?
Oh my god you are probably right, at least according to their jobs website [0]. There are plenty of jobs posted, I looked at a few job categories and there are pages over pages of openings in their database. Not 14,000 though, it seems like maybe 3,000 at most. Still a lot for a company with such a headline.
Some companies tend to post jobs they don't have, to be able to show that they are productive and investing in resources. The reality is they just want to show competition/shareholders that they are hiring a lot of people and investing in new markets.
Most of those jobs will be re-posted again and again as they are never filled.
Some other nasty companies put jobs online as a trap to interview competition exec/directors and know more about their strategy, then they never hire them.
Welcome to the world of greed.
I concur. I have seen at places where I work that even with complete hiring freeze there are open positions posted on job portal. And as you said at higher level it must be to glean information.
An acquittance who worked at Cisco mentioned a month back or so that it was in trouble. In fact, the person mentioned switching over to another company for the same reason.
This news suggests that those apprehensions were not unfounded.
This seems to be Cisco's standard operating procedure. They do big layoffs from the product groups that are underperforming. But all those affected can apply to jobs in other groups that are making money still. It seems to be Cisco's way to de-staff a product area quickly and let the employees figure out what to do.
Honestly when I worked at CSC it was the same way. The amount of people we'd have in our group that we'd have to interview from other parts of CSC in order for them to stay employed was staggering. Even worse was many of them were developers for over 20 years and couldn't program much of anything =/
The vast majority were Java developers. I always felt bad about it as I never passed a single one of them during my time working there and interviewing them. They were in such a shitty position but at the same time I only ever had one of them actually able to talk through how to code something (and even that person said they only "know how to do a for loop in theory" which I don't understand but I digress).
I'm fine interviewing people but interviewing people within the same company where if they don't pass your interview they're going to be laid off? Obviously it's far worse for them but it's a shitty situation all around.
Did the company actually decided to keep/lay the employees individually based on your feedback from the interview? Or were the destiny already decided beforehand and the interviews were just some acting?
> Did the company actually decided to keep/lay the employees individually based on your feedback from the interview? Or were the destiny already decided beforehand and the interviews were just some acting?
A bit of a mix of the two. Essentially you were "soft laid off" if your project ended and your group didn't immediately have another project to put you on so you could apply to work at another group within CSC. If your interviews went well (and they all did interviews differently to the point where some groups did zero interviews and some, likes ours, treated them as a new hire (we were an acquisition so we didn't think they'd have the same quality as us)) then you would stay employed and just work at another group. If the interview(s) didn't go well then you were eventually laid off.
I never went through this process beyond the interview side of things but it was explained to us multiple times. The crazy thing is CSC, at the time, was so large (over 97k employees) that it wouldn't surprise me if each of the larger groups did this even differently. This was just my experience.
Not really sure I can give you an acceptable answer here (I know I felt the same). Essentially we were told "interview X, he or she is a CSC employee working with Y title in Z group". I suspect many of them have become non-developing architects or technical managers or something. Some of my colleagues had a tiny bit better luck but for the most part the developers we interviewed didn't really know much about programming.
To add some context we were part of a larger group at CSC that handles government contracts and you essentially only make money when you fully staff a contract so many folks in the industry referred to them as "butts-in-seats" contracting so it's not entirely surprising.
I understood the largest H1B users were companies such as Infosys, TCS and Wipro, companies whose core business developed as offshore/outsourcing locations.
I work here and this is a surprise to me, company seems to be doing well there has been considerable hiring in my organization in the past few months so I am not sure why 20% of the employees are being laid off.
It's often easier to fire under performing employees en masse for legal reasons. Fire one and they can claim discrimination etc. Be part of a layoff and there's not much argument.
If it's just 20℅ it could just be cleaning out the ranks while continuing hiring.
The layoff is probably coming from the hardware business unit. If you're in CTG or CSG, there probably won't be many changes as Cisco is shifting gears to become a software driven company.
Long story short: I think that, in the next year, we will see a marked shift toward subscription pricing. Amazon pushing subscriptions. Dollar shave club for X. Same for Cisco - getting recurring revenue through security/SDN/SaaS subscriptions rather than one-time hardware sales seems to be a safer long-term bet.
That's a logical pivot; I'm slightly surprised they didn't try beefing up their extended support or doing a soft rollout first. Did they lay any groundwork or expectations for migrating their platform?
It's like this already -- you pay yearly maintenance fees for access to software upgrades. If you let it lapse and then want to re-enroll, you're still on the hook for the lapsed time. Maintenance fees typically don't include your support contract fees, either.
It's already happening. Several examples come to mind, but for now I'll use one that is relevant to Cisco: Palo Alto Networks offers several subscription based services for its security/networking hardware.
To guess, I think it is because Cisco will pursue a strategy of software defined networking. That means more consolidated hardware development by fewer employees.
I don't think commodity hardware will fully replace all business of places like Cisco. For one, Cisco does have large contracts like the Chinese Government -- they helped build the "great firewall".
I have no idea how this shakes out. But multiple companies in the traditional skew/license business are having to adjust (as others stated) to a different world.
In the past, i would agree. There seems to be a push into by the military industrial complex into "Cyber Warfare", so i think Cisco is angling for some Government contracts.
Cisco is a very hierarchical company. Every time there is a shake up, most people affected are not generally bad performers but those who fall under spineless Directors/VPs. Also, Cisco generally starts hiring right away.. So, in effect nothing changes drastically. You still have long hierarchies and the drab environment. The same set of names at the top level get reassigned or regrouped and nothing major changes. I feel that it's a company going down, though it will be a very slow process (perhaps a decade more) before it becomes insignificant in the tech field. (mainly because of the money they have in the banks/overseas). It's very difficult to expect the company to transform itself unless it lets other people grow and not feed suck-ups.
If you listen to tech CEOs, there's this huge "shortage of software engineers". Surely any former Cisco employee with software experience will be snapped up within days by all these tech companies desperately searching for tech talent.... Any day now....
If you listen to tech CEOs, there's this huge "shortage of software engineers".
There is no shortage of software engineers. What there is, in the eyes of those CEOs, is a shortage of H1-B visas -- i.e., cheap labor from abroad with low mobility. Of course, the alternative is to invest in training citizens and permanent residents, who will then go and get higher-paying jobs elsewhere. So the myth of the software engineer shortage lives on...
I can assure you most H1-B employees would be scared to mess with a good thing. Unless they are well experienced with H1-B or their job offer is quality w/ promises of an immigration lawyer taking care of it.
There is a shortage of good software engineers. There are many people currently employed who call themselves software engineers but I'm not sure what they're actually doing. I saw this a lot when I was doing hiring -- people who can't even write simple loops or know what 12 mod 5 is.
> I'd hate to be looking for a software engineering job right now
Why? These Cisco lay-offs are hardware engineering related and the other ones are not nearly as big and are pretty typical (unfortunately). Software engineering is not only in HUGE demand but it's growing incredibly quickly. I have no idea how the hardware engineering space is behaving but software is off the charts.
Cisco is hiring software engineers. Look at their acquisitions
in the last couple of years and they are software companies. They have a big focus on big data for security analytics.
I think hardware will take a hit for sure. Cisco will consolidate development around software defined networking hardware and then charge a yearly subscription fee to use its network OS.
Reading some of these comments has reminded me just how much I no longer have to really think about in full-stack engineering, because it's been so successfully abstracted away. It's like reading an abridged version of the history of technology growth.
This is Cisco admitting defeat to commodity manufacturers. I wonder if there is a massive skilled worker crunch on the other side of the world from which the commodity manufacturers operate (despite the huge population).
Is it? Because I guarantee if you go look at the Akamis, and Level 3's, really any large scale CDN or Telecom network you will find that is majority Cisco and Juniper. Aside from a handful or very large companies like FB and Google that have the expertise to build their own, you won't find a lot of commodity hardware running the datacenter.
The root cause is: this is capitalism.
"Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth-the soil and the labourer.
There are many government pressures that cause this unpleasant business to happen; it could have been a ridiculous fine for having to many employees or a bad percentage of a certain kind of person or some other fine.
This is completely untrue and incomprehensible. Governments increase their tax base. Unemployed people mean draining tax coffers to cover unemployment insurance claims. A fine for having too many employees?
in 2k1, if memory serves right, they laid off approx. 10k folks. i would guess, in percentage terms (given at least 10% less employees), it might be similar though...
70,000 employees is way too big. Not know much about how Cisco runs its business, half of it must be sales, business and enterprise solution consultants.
Looking for another job when there are massive cuts like this also degrades the salary they accept on their next job because of the competition.
I wish companies, if possible, throttled layoffs a bit more instead of large chunks like this, but that is unlikely as the board/CEOs are looking for a stock uptick when they do and don't want to drag it out to affect the market value (translation: their own pay / stock value/price).
We rarely look at the amount of money lost in communities when things like this happen but it would be nice if reporters put out the lost community dollars/salaries along with the layoff number. The Great Wage Stagnation continues in our consumer driven economy.