Firms warned to monitor service as Cisco cuts staff

Antony Adshead

Analysts have warned users to be on their guard to ensure that network giant Cisco does not cut back on technical support and investment following its recent announcement of 8,000 job cuts.

Cisco announced it was shedding staff last week, blaming a slowdown in the US economy and fears that it will spread outside the US.

The Cisco announcement comes after Intel's announcement of 5,000 redundancies due to a stagnating chip market, and a move by Motorola to slash 7,000 staff.

Larry Velez, an analyst at Meta, said that although the lay-offs would have a limited impact on users, companies should contact Cisco to seek assurances that service standards will not be adversely affected.

"What users should be concerned about is their region. Are the lay-offs going to have any effect on the intellectual capital that supports their business? They should phone up the regional managers for Cisco and find out whether the lay-offs affect them," Valez said.

He added that Cisco's recent hiring spree may have backfired because the company had banked on the networking equipment market growing faster than it has done.

Cisco's cost-cutting measures have caused consternation among financial analysts about the state of the world economy and the likelihood of a downturn.

The company employs 44,000 people worldwide. It expects the cuts to affect up to 3,000 temporary workers and up to 5,000 permanent staff.

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