Layoffs – Blessing or Curse?


LayoffsSM

On August 15, Cisco announced that it would be laying off about 4,000 workers across various parts of the organization.  The timing of the announcement comes after the end of Cisco’s fiscal year.  Most of the times that Cisco has announced large layoffs of this sort, it comes in the middle of August after they analyze their previous year’s performance.  Reducing their workforce by 5% isn’t inconsequential by any means.  For the individual employee, a layoff means belt tightening and resume updating.  It’s never a good thing.  But taking the layoffs in a bigger frame of mind, I think this reduction in force will have some good benefits on both sides.

Good For The Goose

If the headline had instead read “Cisco Removes Two Product Lines No One Uses Anymore” I think folks would have cheered.  Cisco is forever being chastised that it needs to focus on the core networking strategy and stop looking at all these additional market adjacencies.  Cisco made 13 acquisitions in the last twelve months.  Some of them were rather large, like Meraki and Sourcefire.  Consolidating development and bringing that talent on board almost certainly would have required that some other talent be removed.  Suppose that the layoffs really did only come from product lines that had been removed, such as the Application Control Engine (ACE).  Is it bad that Cisco is essentially pruning away unneeded product lines?  With the storm of software defined networking on the horizon, I think a slimmer, more focused Cisco is going to come out better in the long run.  Given that the powers that be at Cisco are actively trying to transform into a software company, I’d bet that this round of layoffs likely serve to refocus the company towards that end.

Good For The Gander

Cisco’s loss is the greater industry’s gain.  You’ve got about 4,000 very bright people looking for work in the industry now.  Startups and other networking companies should be snapping those folks up as soon as they come onto the market.  I’m sure there’s a hotshot startup out there yelling at their screen as I type this about how they don’t want to hire some washed-up traditional network developer and their hidebound thinking.  You know what those old fuddy duddies bring to your environment?  Experience.  They’ve made a ton of mistakes and learned from all of them.  Odds are good they won’t be making the same ones in your startup.  They also bring a calm voice of reason that tells you not ship this bug-ridden batch of code and instead tell the venture capital mouthpieces to shove it for a week while you keep this API from deleting all the data in the payroll system when you query it from Internet Explorer.  But, if you don’t want that kind of person keeping you from shooting yourself in the foot with a Howitzer then you don’t really care who is being laid off this week.  Unless it just happens to be you.


Tom’s Take

Layoffs suck.  Having been a part of a couple in my life I can honestly say that the uncertainty and doubt of not having a job tomorrow weighs heavily on the mind.  The bright side is that you have an opportunity to go out and make an impact in the world that you might not have otherwise had if you had been at your old position.  Likewise, if a company is laying off folks for the right reasons then things should work out well for them.  If the layoffs serve to refocus the business or change a line of thinking that is an acceptable loss.  If it’s just a cost cutting measure to serve the company up on a silver platter for acquisition or a shameless attempt to boost the bottom line and get a yearly bonus that’s not the right way to do things.  Companies and talent are never immediately better off when layoffs occur.  In the end you have to hope that it all works out for everyone.

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2 thoughts on “Layoffs – Blessing or Curse?

  1. I have been a part of both sides of the layoff story: the recipient and the sender. It is tough. On the receiving end, I took things a little bit personally. It shook my confidence very early in my career.

    But having been on the other side, I have a better perspective. Even people who might seem like the most callous people take this stuff so seriously. It is never just a numbers game. People making decisions (in my experience anyway) have always taken this as a very personal task. It doesn’t make it any easier, but it is the only way to maintain some humanness while going through hard decisions.

    On the business side, I think you are absolutely correct in highlighting the acquisitions. Turnover is typically a function of focus. If this were just about operating expenses, I would be worried, but I suspect it is really a concerted effort to double down on emerging trends. Chambers already said they were slow to respond to SDN. Accelerating by making some tradeoff decisions seems like the natural business next step.

    -Mike Bushong (@mbushong)
    Plexxi

  2. Pingback: Plexxi Pulse: Integrating with Opscode’s Enterprise Chef - Plexxi

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