Cisco will shut its consumer Flip video camera business and cut jobs, as part of a major retrenchment back to its core product lines.
In a wide-ranging memo issued to Cisco employees on 4 April chief executive John Chambers said the company would refocus around its core product lines and away from some of its wilder areas.
On Tuesday, that retrenchment became reality, as Cisco announced the shut of Flip and the rolling of its consumer videoconferencing service, Umi, into its business telepresence wing. All in all, this stage of the cutback is expected to lead to a reduction of around 550 employees in the fourth quarter of 2011, the company said.
Cisco will cut its Flip video business and wrap its consumer video-conferencing system, Umi, into its enterprise-focused telepresence division
Photo credit: Cisco
"We are making key, targeted moves as we align operations in support of our network-centric platform strategy," Chambers said in a statement. "As we move forward, our consumer efforts will focus on how we help our enterprise and service provider customers optimise and expand their offerings for customers, and help ensure the networks ability to deliver on those offerings."
The Flip business will be closed down. Existing FlipShare customers and partners will receive a transition plan, though Cisco would not disclose when. Flip's main offices are located in the US.
Umi will be folded into Cisco's enterprise telepresence wing and its consumer products will be dropped. Umi was partially responsible for dragging down the company's second-quarter results of 2011.
Additionally, its Home Networking business will be refocused "for greater profitability and connection to the company's core networking infrastructure," Cisco said.
As a consequence to the changes to its consumer division, Cisco will take a $300m (£185m) pre-tax impact to its GAAP financial results in the third and fourth quarters of its 2011 fiscal year, the company announced.
Cisco bought Flip's makers, Pure Digital, for $590m in 2009.