In another move to rework its budget, Cisco has sold and signed over its manufacturing operation based in Juarez, Mexico to Foxconn Technology Group.
Cisco attributes the reasoning behind the sale as "another step in Cisco's efforts to streamline operations and supports Foxconn's commitment to co-locate with customers in order to better meet their end-market needs."
Financial details of the transaction have not been disclosed yet, but the deal is expected to close by this October.
Given several recent reports about Cisco's slump and efforts to revive profit growth, this news doesn't come as much of a surprise. Amidst Cisco Live, the company's annual conference that took place last week in Las Vegas, it was reported that Cisco is preparing to cut anywhere between 5,000 to 10,000 jobs before the end of August to adjust for long term costs.
The Juarez facility, which is dedicated to building video and telecommunications equipment for the service provider market, retains roughly 5,000 employees. Thus, if this is what Cisco was planning in terms of job cuts, that means these jobs could just be transferred over to Foxconn as it assumes control of this location.
For reference, Foxconn already has about 200,000 employees worldwide with operations based in both North and South America, as well as Europe and Asia.