Cisco Announces Additional Detail of Workforce Reduction of 6,500

Cisco Systems CSCO provided additional detail Monday about its plans to reduce its global workforce by 6,500 employees - part of an effort to save $1 billion in annual operating expenses. The reduction would equate to 9% of Cisco's regular full-time employees. The technology company has challenged itself to cut costs in a difficult operating environment, echoing a similar measure by Goldman Sachs GS to save $1 billion. The Cisco plan "includes approximately 2,100 employees who elected to participate in a voluntary early retirement program. This also includes a reduction totaling approximately 15 percent of vice president level and above employees." Investors in Cisco have been punished in the past 14 months. Since the Spring of 2010, when the stock was above $25, shares have fallen to just above $15. Cisco expects that it will recognize total pre-tax restructuring charges to its GAAP financial results of $1.3 billion over several quarters. Cisco also announced Monday an agreement for sale of its set-top box manufacturing facility in Juarez, Mexico, to Foxconn Technology Group. According to the release, "The approximately 5,000 people employed at the facility will become employees of Foxconn in the first quarter of fiscal 2012 and no job losses are expected as a result of the sale." Cisco Systems designs and sells IP-based networking and other products related to the communications and information technology industry.