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Cisco axes Flip camera business, plans 550 layoffs

Tue, 04/12/2011 - 8:00am
Maisie Ramsay, Wireless Week

Network gear maker Cisco is pulling the plug on its Flip camera business and plans to layoff 550 employees as part of a move to get out of its consumer products business.

The company said the restructuring was necessary to refocus on four of its five key company priorities: core routing, switching and services, collaboration, architectures and video.

"We have a very strong network-centric platform, and we'll continue to deliver and innovate on that strategy," a Cisco spokeswoman said.

The restructuring will not affect Cisco's plans for its Cius business tablet, the spokeswoman said.

The announcement came a week after Cisco CEO John Chambers said in a memo to company employees that the company needed "more discipline" and that he would take "bold steps" to narrow the company's focus.

"Our strategy is sound. It is aspects of our operational execution that are not," Chambers said in the memo. "We have been slow to make decisions, we have had surprises where we should not, and we have lost the accountability that has been a hallmark of our ability to execute consistently for our customers and our shareholders. That is unacceptable."

The decision to shift Cisco's strategy back toward its network equipment business will cost the company $300 million in restructuring charges during the third and fourth quarters of its 2011 fiscal year.

The company's Home Networking business will shift its focus to core networking infrastructure for home video services. Cisco's Umi telepresence technology will be integrated into the company's business telepresence line, versus its current focus on consumer applications. Cisco's Eos media solution business will be assessed for use in the company's video technology business or "other market opportunities."

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