Cisco Death Spiral

A little Cisco Primer and why you are about to be LR'd

The start of Cisco's Fiscal Year is August 1
Q1 (August , September , October)
Q2 (November , December , January
Q3 (February , March , April )
Q4 (May , June , July)

The previous fiscal year's results are announced around August 15th (hence the layoffs)

Cisco is preparing for a much deeper downturn than most (I'll get into that in a minute). Cisco is now in a death spiral that is fed by 2 major factors:

Low employee morale primarily from LR uncertainty
Decreasing product quality primarily due to creep

Let's start with number 1, employee morale.
Take as look at the FY calendar above and you might notice something interesting.

Q1 starts and layoffs are rumored then announced mid August. The Layoffs aren't executed for a full month (September 16th) which means that out of a 90 day fiscal quarter, 45 days have elapsed before layoffs. 45 days! Once layoffs are executed the turmoil and reset period starts which takes at least 30 days. This is the period where the "left behinds" have to scramble and complete work that the layed off folks were working on. This is the period where management tries to provide guidance for the next quarter (Q2). So, at this point we are 75 days into a 90 day quarter. IT is now around October 15th and the mantra is "sell, sell, sell". Why? Becasue Q1 books close in just 10 days (around October 25th)

Q1 was a disaster so now we start Q2 on November 1st. There are 2.5 productive weeks before Thanksgiving break. Morale is low now for obvious reasons but now the horror of "Unlimited PTO" has entered the fight.
"Should I take time off?"
"Maybe my manager will get mad. Our numbers don't look so good."
"Sorry, hon, this is going to be a working Thanksgiving"

December has another 2.5 productive weeks before Christmas break and shutdown week. We are now 60 days into Q2 and have had maybe 30 productive days.
January starts with a renewed sense of vigor and purpose. Employees, stressed and demoralized have imbibed quite a bit more than they usually do and dry january is especially taxing.
from January 5th through the 25th, productivity soars. things are clicking. Then the rumors begin. "Another February layoff?". which brings us to

Q3. The first half (Q1 and Q2) saw a total of 45 productive days out of 180. Morale is low and fear is high. numbers are announced on the February 15th earnings call and, you guessed it, another layoff. This time it's brutal. 10%? 15%?. The next 30 days are consumed by worry and confusion.
It is now March 15th

Q4. May 1st starts a relaitivly productive run until around June 15th when school ends and both Cisco and their customers vacation. Productivity plummets in mid summer because Cisco is a social system that has created embedded feifdoms to accumulate. The uncertainty and fear employees have gone though for the past several years created a deep need to isolate, protect and obfuscate. There are no real handoffs. Employees on their sad "Unlimited PTO" have the necessary knowledge with them at the beach. Orders screech to a halt. Rumors about the August layoff start to trickle out.

"This one's gonna be big"

Number 2, "product quality" is the primary driver for number 1 "employee morale". There is no nice way to put this. Cisco products and solutions simply su-k. TAC su-ks, the entire procurement process su-ks, licensing models su-k, the horrific technical debt in the dozns of codebases su-k.
"innovate & acquire" is translated to "add more su-k on top of that festering pile of su-k".

As you read through the calendar, note that the critical feedback loop between customers and product development is completely missing. Where is it? It simply cannot exist when all employees are living in fear of the next LR.

Cisco's core is still routing and switching. The Splunk acquisition will cannibalize that even further and throw crazy sums of money down the AI blackhole. All the "Hyper" products should be truncated to "Hype". They are doomed to fail for all the reasons stated earlier. Cisco is attempting multiple moonshots while hemorrhaging cash and talent.

The "Unlimited PTO" and "Never-ending LR" model has resulted in just 80-90 productive days out of the entire Fiscal Year.

This results in the Cisco Death Spiral

Comment! It's anonymous!

11 replies (most recent on top)

I was LR'd back in Feb this year, didnt realize how much pressure I felt in the constant negativity loop until I was out from under it. Funny thing is I am a veteran technical resource and care for customers and some of the people that made the cut were honestly never going to make any difference to the business of Cisco and its shareholders. They simply dont have critical mass in engineering to even maintain all the products they already created.

The 2M from Mo--n5 could have paid 10 highly capable engineers for a year! :)

Partial Sales teams should ready for departure in Q2FY25.

Summary:

Cisco has 90 productive days out of 365 each year largely due to the semi-annual firing squad ritual.

Cisco is confused about their position in the market. They are not Nvidia, Google or Amazon. They are not Microsoft or IBM. They are not as startup (Although they desperately want to be seen as one)

Cisco has a core competency: Networking.

Cisco ignores their customers and acquires all sorts of companies that pull them further away from their core competency.

Cisco just dumped 28 Billion dollars into the AI black hole and this round of layoffs is just the tip of the iceberg.

If you survive this round, February is going to be a doozy!

How about when they stopped hiring based on merit?

Cisco's software has been an abject failure for more than 30 years
Cisco became largely dependent on acquisitions starting 30 years ago
The company stole its first hardware designs and software from Stanford 40 years ago

Exactly where along that timeline do you think Cisco hired "based on merit?"

New purpose should be, "we've been terrible the last decade...we'll fix it now"

It's not like IOS, IOS-XR, NX-OS, IOS-XE and others long forgotten magically appeared in "the last decade." The losses failing to "fix it" over decades (plural) is astounding, and it's delayed the release of a lot of what would have been cutting edge hardware by years.

The short version.

Root causes:

Management is incompetent
Individual contributors are incompetent

Side effects:

Cisco can't do development
Large acquisitions will continue to be harder to integrate
Cisco's only people policy for 23 years is abuse and layoffs

The OP nailed it. Does anyone feel good about Cisco? Anyone excited and enthused about the Cisco mission and excited? Anyone think what Cisco does is top of mind to the CxO? I don’t think so, either.We do too much poorly and not enough brilliantly and we are mired in confusion and demoralized wirh not knowing if we be here in six months.

20K sales force in Vegas bowing down to Chuck's squad while the competition is working 20 hour days displacing Cisco products

Very good commentary on current state of affairs. There is no positivity in sight nor in action, everyone is doing their best to protect their own turf, forget products and customers. This is seriously affecting every aspect of productivity, acknowledged or not.

The death spiral has another angle that is not included and considered. Those left over survivors still at Cisco are lucky to have a job, but in a saddened state constantly worrying what is coming ahead, and changes will only multiply in speed, and in quantity. Those LRed are totally different story….

Cisco policy of constantly burying dead bodies via LR is creating another seismic change. Many of these very smart and extremely qualified people, eventually get jobs, and most likely end up at competitions, or as customers. Guess what, these Cisco discarded smart folks gutted to their soul, become enemies, who will they vouch for? Yes, against Cisco, and against any progress and support Cisco wants from their Customers in deploying its technology. The more bodies Cisco bury, more psychological war fare against next generation of products and services. That is the true death spiral 🌀 both internal and what is developing externally. Most corporations can’t sustain and survive this constant talent drain, and negative biases.

Yes - and how much did Elton John cost at Cisco Live?

overthinking much? Start simple: How about when they stopped hiring based on merit? Or how about when they decided their company purpose was powering an inclusive future? New purpose should be, "we've been terrible the last decade...we'll fix it now"

Cisco just finished their ultra-cringy SKO in Las Vegas.

How can you announce you are going to lay off 7,000 people in a month (Sep16) and then send 20,000 sales people to Las Vegas 2 weeks later?

How many employees jobs did Maroon 5 cost? hint - it cost $2m just to book Maroon 5, not including the catering at T-mobile and transportation, etc.

Thread regarding Cisco Systems Inc. layoffs

Cisco Death Spiral

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