Cisco to Shut Down Flip, Layoff 550
Cisco to Shut Down Flip, Layoff 550
Cisco announced on Tuesday it is shutting down several of its businesses, most notably Flip, and will shave its payroll by some 550 workers. The moves are part of a new strategy for the networking giant in which it will look to serve more consumers through its business partners, rather than selling products directly.
“We are making key, targeted moves as we align operations in support of our network-centric platform strategy,” said the company's CEO John Chambers in a statement. “As we move forward, our consumer efforts will focus on how we help our enterprise and service provider customers optimize and expand their offerings for consumers, and help ensure the network's ability to deliver on those offerings.”
Cisco purchased Flip, a digital video camera company, last March for almost $600 million. Cisco will assume production of Umi, the popular HD video chat device for consumers, as part of its business telepresence product line. Cisco will continue to sell its Linksys and Valet Internet routers, but its home networking division, which oversees the routers, will be reorganized around supporting video in the home.
The company will layoff around 550 workers over the next 3 months, resulting in a $300 million charge in the second and third quarters of 2011 related to divestitures and layoffs. The restructuring plan is part of an overall plan to clarify Cisco's increasingly confusing place in the technological sector.
Cisco announced on Tuesday it is shutting down several of its businesses, most notably Flip, and will shave its payroll by some 550 workers. The moves are part of a new strategy for the networking giant in which it will look to serve more consumers through its business partners, rather than selling products directly.
“We are making key, targeted moves as we align operations in support of our network-centric platform strategy,” said the company's CEO John Chambers in a statement. “As we move forward, our consumer efforts will focus on how we help our enterprise and service provider customers optimize and expand their offerings for consumers, and help ensure the network's ability to deliver on those offerings.”
Cisco purchased Flip, a digital video camera company, last March for almost $600 million. Cisco will assume production of Umi, the popular HD video chat device for consumers, as part of its business telepresence product line. Cisco will continue to sell its Linksys and Valet Internet routers, but its home networking division, which oversees the routers, will be reorganized around supporting video in the home.
The company will layoff around 550 workers over the next 3 months, resulting in a $300 million charge in the second and third quarters of 2011 related to divestitures and layoffs. The restructuring plan is part of an overall plan to clarify Cisco's increasingly confusing place in the technological sector.
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