Unconfirmed rumor Cisco is laying off 1,600 WAAS engineers and sales team members

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Unconfirmed rumor Cisco is laying off 1,600 WAAS engineers and sales team members

Rumor that today Cisco has dissolved its entire WAAS engineering and sales team.

Mon, 7/23/12 - 1:59pm View comments

Standard Cisco severance package this go-around

60 days to find a new job. Then 4 months salary and 4 months medical. Then 18 months Cobra.

Update August 3rd:

Cisco guillotines 600 employees based in India

Update August 2nd:

Riverbed Technology: WAAS says: "I'm not quite dead yet!"

"Boasting about a #1 unit market share while having a #2-and-declining revenue share does tend to reinforce the sense that the product is being given away. We hear two kinds of anecdotes pretty consistently from customers: first is that Cisco gives away WAAS or stuffs it into accounts that don't want it, and second is that there's a big gap between the slick marketing story and the product reality."

Update July 30th:

At the 2:30 time mark in the video below, CEO John Chambers spins Cisco's layoffs as "moving our resources around... resources were in the wrong place."

Fox Business Interview with Cisco CEO John Chambers

Update July 25th:

Blog post by Prashanth Shenoy - Cisco Senior Marketing Manager:

Cisco's continued commitment to WAN Optimization (WAAS) Market and Our Customers

"Recent speculation that Cisco has dissolved its WAAS business is inaccurate. Cisco's strategy to deliver WAAS pervasively as part of the Cisco WAN infrastructure remains unchanged.

"In conjunction with the broad based success and adoption of the WAAS solution in the market, Cisco is integrating the sales coverage into the mainstream sales force within the US. For our customers and partners, this will simplify how they engage with Cisco by providing a single point of contact for the full range of Cisco networking solutions.

"Cisco is #1 in unit share (Source: Infonetics) for the last 3 quarters, a clear customer validation of Cisco's WAN-integrated optimization strategy."

Note from Brad Reese:

WAAS sales results are listed under the product reporting category of Cisco Router sales and could be one of the reasons Cisco is forecasting that in FY14, its Router gross margin will be less than Cisco's product gross margin average, for more information on Cisco's product gross margin forecast see:

Cisco's FY14 router gross margin will drop below its product gross margin average

However, according to others within Cisco:

The Cisco WAAS sales team has been let go and some engineers have been reassigned.

The Cisco Application Delivery Business Unit (ADBU) has been dissolved.

Some WAAS product managers and marketing people were reassigned and the rest were absorbed into the group that makes the Cisco WAAS Express for the Cisco Integrated Services Router Generation 2 (ISR 2).

Network World: Cisco layoffs this week part of 'Transformation Project'

"The 1,300 employees let go this week may be the tip of an iceberg that ultimately sees thousands more released as Cisco winds up a challenging fiscal year 2012.

"Sources say Cisco has enlisted a consulting firm to advise the company on a sweeping consolidation that could result in several more so-called 'limited restructurings.' The plan is part of Cisco's Transformation Project, an effort led by Senior Vice President Angel Mendez to 'deliver greater productivity, agility, and growth' by tweaking the company's product and services portfolio, and operational capabilities.

"They are doing a companywide consolidation called the 'Cisco Transformation Project,' a source said. 'People are hush-hush about it, but ... they are trying to eliminate organization and functional redundancy. I expect layoffs to keep coming.'

"Sources say Cisco is doing a 'bottom 5% elimination,' and that layoffs may continue until December."