Cisco Dropping Flip, Shares Down
Tuesday, April 12th, 2011
Cisco Systems Inc. released a statement indicating that it would decline to renew four of its major company priorities in a restructuring of its operations intended to, according to the company’s CEO to address the concerns of investors and employees about the company’s portfolio.
As part of this act of consumer restructuring, the company intends to drop core routing, switching and services, collaboration, architectures and video according to Beacon Equality Research. Most importantly, Cisco will shut down Flip business and eventually support to its current FlipShare consumers. For the time being, the company will provide support to its FlipShare video-sharing customers. However, as a broader transitional measure, the company intends to invest further into its Home Networking business.
In a comment released by John Chambers, CEO of Cisco Systems Inc., he indicates that the company is moving toward consolidating and aligning operations to focus on further development of its network-platform strategy. He went on to say in the LA Times that the company, in this economy would be required to take “bold steps” in order to realign the company’s interests in this climate. The intention is to focus on a network-centric strategy for the future of Cisco.
Specifically, the restructuring changes will lead to Cisco releasing roughly roughly 550 employees by the end of the year. This move indicates that the company would prefer to streamline its production and increase its focus on core target markets. Particularly, the move to shut down the Flip Video unit is an indication that it intends to narrow the scope of its business.
However, the restructuring attempts by the company have already hit barriers. A federal judge recently ordered Cisco to settle with Commil USA $63.8 million for patent infringement on a piece of wireless technology.
Article by Andrew Timm
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
Tags: cisco , flip share , technology
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