Cisco to Layoff 6500 Employees

Cisco announced today that it will be laying off 6,500 employees as part of the "comprehensive action plan" to rightsize the company. 

According to the press release, this includes 2,100 employees who chose to participate in an early retirement program. This includes a reduction of 15 percent of their VP and higher executive level employees. 

This process will cost Cisco about $1.3 Billion USD in severance fees and other payments. Hopefully for shareholders it will yield some cost savings and help the company make a turn in the right direction. 

In addition to the 6,500 employees, a set-top box manufacturing plant in Mexico will be sold to Foxconn Technology Group (the same group that makes iPhones and other electronics). This equates to 5,000 additional employees being shed from Cisco's payroll (and shifted to Foxconn's payroll) effective FQ1 2012.

Full details can be found in the press release located here.