CISCO to cut 5500 jobs, certs still worth much?

Hi guys,

I just wanted to ask are cisco certs worth the investment for the future.

From what cisco are planning they are looking to cut 5500 jobs and plan to focus their efforts into cloud computing.

I also read something along the lines of router sales dropping by 7% and switch sales only rising by 2%.

I am currently studdying for the CCNA cert and once obtained I plan to get an entry level networking job and then move up the cisco ladder.

My question is will it be worth the investment in 5 or so years time in obtaining
and going along the cisco R&S career path.

Thanks guys
Pujan

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dustervoice

You should only can concerned about cisco cutting jobs if that the company you want to work for. Apart from that, majority of companies uses cisco kit so the cert still has value and organisations continue to seek candidates with cisco skills.

networker050184

In five years who knows, but certifications are short term goals and in the short term Cisco certifications are still on top in the industry,

Legacy User

Getting cisco certs can give you immediate returns right now. What will be in demand in 5 years or so is to far to see and whats relevant and whats not can be anything despite speculation. Even though cisco is allegedly laying of X amount of jobs doesn't mean that businesses that have cisco equipment are going to throw out that equipment or something. But If for example not saying it will happen Cisco ever goes belly up you just learn another platform thats in demand arista, juniper, whatever which all applies the same network concepts we already use in cisco devices.

mbarrett

Cisco has acquired (swallowed) around 15 smaller companies in the last year. It's natural that there will be some consolidation as they work to absorb these companies into their corporate world.
As far as I know, Cisco remains as a leader in the R&S field. I think the plateau (or slight decline) in sales in these areas are mostly a sign of how the market is changing. The industry is trending more towards SDN and virtual stuff, these will naturally reduce demand on hardware.
I read someplace they had a 16% increase in their security products.
As a CCNA I wouldn't be too concerned, companies are going to have Cisco in their environments for the forseeable future.

NetworkNewb

<sarcasm> Yea, I would stop working on your Cisco certs. It was a good run for Cisco... And I hope everyone stopped going after Microsoft certs when had their huge layoff of people last year too! Definitely been a huge decline in demand for those skills since that one. </sarcasm>

Iristheangel

Here's the hard numbers: https://newsroom.cisco.com/press-release-content?type=webcontent&articleId=1784571

Switching remained the same for the most part
Routing sales were down 4%
Everything else was up for the most part

Sales does not always equate to market share - you always want to have sales growth but a year where you aren't getting growth does not equal losing your vast market share or the dominance in the market. If there was loss yearly for several years, I'd be concerned about retaining market dominance but there was routing and switching growth last year.

Market fluctuations happen. Large Fortune 100s tend to eliminate jobs to open up jobs in other areas or to reduce redundancy. i.e. Cisco acquired something like 10-15 companies in the last year. Do you think Cisco needs to keep a separate help desk, human resources, accountants, legal teams, etc from each company they acquired when they have a large in house structure for that? If you panic and worry about every fluctuation in the market, you're going to be changing your career plans yearly.

Edit: Also I mentioned this a couple times in the other Cisco layoff post but stock is at a 10Y+ high being above $30 right now. In general, the company performs pretty well stock-wise and probably isn't going anywhere or the value of the certifications either:

stocks.JPG

kohr-ah

Yes they are still worth something.

Companies fire people all the time. It is called business. Microsoft does it, Google does it, Cisco does it, and even smaller companies do it. The catch is you dont hear when a 8000 employee company fires 800 of them.

A certification is to be treated like a college degree in a sense. You have dedicated a part of time out of your life to further yourself and show that you understand a technology up to a proficiency level (this is what a cert means).

The certs by them are no less valuable because they are terminating employees. If that was the case we should all start moving away from ESXi and VCP certifications as VMWare had layoffs not that long ago.

TechGromit

pujan96 wrote: »

I just wanted to ask are Cisco certs worth the investment for the future.

From what Cisco are planning they are looking to cut 5500 jobs and plan to focus their efforts into cloud computing.

I highly doubt more than 10% of those Cisco employees have Cisco certifications, I also question how many have IT technical knowledge. Just because it's a technology company, doesn't mean every employee is a rocket scientist. You have clerks, sales staff, administrators, customer support, etc. You probably only talking about 500 people that have any degree of technical knowledge that are part of the layoff. It's not like the job market will suddenly be flooded with 5000 highly technical employees each with a dozen Cisco Certifications on there resume.

apr911

Sales growth is great but not something to set career goals off of. Its like all the investors quibbling over Apple's forecasted iPhone growth.

Apple has progressively sold more iPhones each year than they did the year before since the iPhone was released in 2007 through 2015. In 2016, they are about 90Million units behind 2015 numbers (246million sold in 2015 vs 160million sold in 2016 through Q3). Their best Q4 to date was in 2015 when they sold 48M units so unless they pull a rabbit out of the hat and some how manage to double that, they are going to sell less iPhones than they did in 2015. (Note Apple reports on a rolling fiscal year not calendar year basis. Q4 for Apple runs through September 30. October 1 begins FY2017)

It will mark the first decline in sales of the iPhone since it was introduced. Does this mean Apple is in trouble? No. They are still on track to sell 200M units which even though its a 20% reduction from peak, eventually you reach market saturation. Most iPhone users dont upgrade every year so without new markets to introduce the device to and therefore get a burst from, eventually your sales plateau with ebbs and flows and occasional spikes if/when some ground-breaking new feature is introduced that everyone wants to the extent they break out of their typical refresh pattern.

The iPhone is an extremely good example of this because its a consumer product with yearly model updates that some consumers rush to upgrade yet their sales are still falling. This compares to Cisco well because Cisco products are a business product with a slower update cycle and most importantly, most companies have a 3 year hardware refresh minimum and they buy gear that will last them for at least 3 years. Some have longer refresh cycles, some will extend their refresh cycle if the gear they are on is still supported via extended contract and capable of handling the load. Most companies try to avoid having to upgrade before 3 years because its a capital expenditure (capex) that has not been depreciated on their taxes.

As to Cisco's workforce reduction?

As others have pointed out, Cisco has acquired several other companies in the past 12 months. Between June 1, 2015 and May 31, 2016 (the most recently reported quarter) Cisco has acquired 8 different companies. 4 of those companies (OpenDNS, Acano, Lancope and Jasper Technologies) are listed on LinkedIn as having 200-500 employees. 3 more of those companies had 50-200 employees. Only 1 company had 10-50 employees.

So Cisco is trimming some of the redundancies. The concern should not be the number of positions Cisco has cut but where those jobs have been cut. After all for a company like Cisco, automated functions and outsourcing can cut costs in administrative/support roles like HR, payroll and the like but Cisco lives and dies by their innovation of new products. For this reason the loss of Soni Jiandani, Mario Mazzola, Prem Jain, and Luca Cafiero concern me more than the loss of 5,500 others.

Those 4 left because they lost their "favored" status they had under Chambers. A status that made them quite wealthy but at the expense of creating discord among other rank and file employees. The Spin-In model that Chambers permitted them to operate under should have never been allowed in the first place. Nonetheless, these 4 were responsible in some way for most of the "home-grown" Cisco innovations over the last 20 years so their departure is disconcerting.

Cisco can certainly survive without them and may actually do better without them (after all, how many "innovative" ideas can 4 engineers really come up with on their own? Their departure gives other Cisco engineers a chance to shine.) and even if they dont, Cisco has $53Billion in cash reserves. More than enough to continue to buy innovation by swallowing smaller startups as they've done for 20 plus years now

I also expect many of these 5,500 jobs are not job losses per se but rather a reallocation of budget and head count. Thus while Cisco is letting 5,500 employees go, their total headcount will probably remain largely unchanged as the headcount is shuffled to other divisions. Its no different than any other conglomerate laying off personnel in one division to make room for growth in another.

TechGromit

apr911 wrote: »

This compares to Cisco well because Cisco products are a business product with a slower update cycle and most importantly, most companies have a 3 year hardware refresh minimum and they buy gear that will last them for at least 3 years.

Three Years? I should be so lucky, I have switches that are 10 years old. I can't get switches replaced until the last day of LDOS, even then I have a bean counter with a watch telling me what time I can replace the switch.

apr911

TechGromit wrote: »

Three Years? I should be so lucky, I have switches that are 10 years old. I can't get switches replaced until the last day of LDOS, even then I have a bean counter with a watch telling me what time I can replace the switch.

LOL. So very true. Your mileage may vary.

When I say 3 years, Im thinking environments that are production, customer and on the edge. Top of rack switches often only get replaced when they're saturated which might not happen until the day they die. Office switches typically have an even longer lifecycle because there is little argument/drive to spend money to put every desktop in the office on gig or 10-gig when 100Mbps will do.

The closer to the edge/core you get, the more likely you'll have more frequent refreshes while the extremities are left to die.

3 years is also more or less the midway point for IRS depreciation of capital expenditures over 5 years and by this point the company has already depreciated the asset by 70-80%.