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Cisco job cuts 'the hardest decision' for Chambers

Cisco CEO and president John Chambers said the decision to cut 6,500 jobs was the toughest of his life, but it was necessary to ensure the future of the company.
Written by Josh Taylor, Contributor

The decision to cut 6,500 jobs from Cisco despite strong financial results was necessary to ensure the future sustainability of the company, according to CEO and president John Chambers.

Rahm Emanuel and John Chambers
Image: Josh Taylor/ZDNet

In August, Chambers announced that Cisco would cut around 8 percent of its workforce in a restructure, despite a set of strong financial results for the networking giant.

Speaking at the close of Cisco's Internet of Things World Forum in Chicago on Thursday, Chambers said that the industry was "at an inflection point" with the rise of the Internet of Things that required the company to reinvent itself.

"No CEO likes change, but in this market, if we don't change, we will be left behind," he said.

"I saw that at IBM and it took them two decades to recover."

He said that the decision to restructure the company was out of a desire to not be one of the big companies left behind.

"Forty percent of the Fortune 500 that exist today probably won't exist in a meaningful way in a decade. [It was] the hardest decision I've ever made. We had our best year ever ... we did a very good job with record earnings. And yet ... we realigned 6,500 people."

Chambers said that Cisco completely reorganised its engineering division, and changed sales focus from selling routers and switches to focusing on what outcomes customers are looking to achieve.

"We weren't moving fast enough, and we need to turn our organisation on its head."

He said that with the Internet of Things comes the need for companies to begin to collaborate together to create an ecosystem where the focus isn't on the number of devices connected, but rather the benefits and outcomes of the connected devices.

"The industry is going to go through tremendous disruption. Cities that don't change will be left behind. Manufacturers that don't change will be left behind." he said.

"It's got to be new business and technology models. It's about how you get the right data, at the right time, for the right purpose, so the right person or right machine can make the right decision."

The next big move would be into analytics, Chambers said, saying that the industry trend of being agile would move into being predictive.

"Because when you're predictive, you're ahead of the game," he said.

"Then it moves into where you become really hyper-aware. It requires fast IT in a way we haven't gotten before."

Chambers said that governments are quickly getting on board with the move to the Internet of Things, highlighting Chicago's efforts in the last few years.

Chambers was then joined on stage by Chicaco mayor and former White House chief of staff Rahm Emanuel, who said the city is looking to make teaching coding mandatory in schools.

"Code writing will be the language of bilingual," he said.

At the closing of the event, the company announced that the next Internet of Things World Forum will be held in Dubai, and Chambers told customers at the event to not be afraid to overhaul their own businesses.

"We can come together as an ecosystem to make it happen. I believe we can literally change the world," he said.

"Have the courage to disrupt. Each of us has to disrupt our own company."

Josh Taylor travelled to Chicago as a guest of Cisco.

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