What to Do With Cisco After Layoffs Confusion

6 | By Strategic Tech Investor Staff

Amid all the breaking news about the layoffs at Cisco Systems Inc. (Nasdaq: CSCO) this week, I appeared on CNBC World to share my thoughts. I let that audience know what’s behind Cisco’s layoffs – and shared my thoughts on what investors should do with their stock (and why Cisco’s fat dividend matters here).

Now I want to share all that with you folks as well. Just click below.

6 Responses to What to Do With Cisco After Layoffs Confusion

  1. Linda says:

    I already get all this info but I don’t know how to get in on those stocks. Do I go to the stock market myself and purchase them? I don’t want to appear stupid about this. I have a money market person who invests in stocks already for us, so I’m not sure what to do.

  2. Bob Schubring says:

    The “eminence grise” in this story, is last week’s disclosure by an anonymous hacker who seems fond of Gucci designer leather goods, of a deeply-embedded set of malware lurking in proprietary systems, that has been used by a covert organization calling itself the Equation Group, to construct new security holes in existing computer networks. The hacker is auctioning for sale on the Dark Web, a number of hacking tools he says he stole from Equation Group. Because proprietary networking hardware can contain code known only to the hardware maker, a company who create a software-defined network that relies on proprietary hardware, is taking a major risk, on whether that proprietary hardware is secure or not.

    A software-defined network, that uses entirely open-source code, can be studied and verified secure, by software engineers. A software-defined network that relies on trust in a single corporation, for security, is inherently insecure.

    I anticipate further volatility in this market, as this story develops.

    The companies I’m watching closely, are two who share the same venture-capital lender: Dell and BlackBerry. The reason: A useful countermeasure for hacking that exploits a concealed hardware fault, it to use known safe hardware to construct a small-but-secure network, then to break up and compartmentalize the analytical functions the company must do with the data. That is, instead of running a single software app on one server, divide the analysis up among many small apps, host a few of the apps on the known safe server maintained in-house, and then rent software-defined servers from Amazon or Microsoft or Google cloud computing, and host the rest of the apps on the rented servers. By this method, a company can keep it’s investment in servers and it’s team of IT workers small and affordable, it can take advantage of cloud-computing to save money and boost reliability, but the data it’s exchanging between the cloud servers and it’s in-house servers is mostly gibberish. A thief who steals access to the flow of gibberish, lacks enough information about the secure, in-house server, to learn anything useful from the gibberish.

    This puts data users in quite a quandary. If our competitors could harm us by stealing information from our networks, we need tight security on those networks. Conversely, if we cannot verify the safety of equipment pitched to us, we cannot afford to risk buying it.

    I have no positions in Cisco Systems and don’t plan to initiate any, until it becomes clear what Cisco’s policy is, on proving their equipment secure. What would be a huge negative for me, is any indication that Cisco is refusing to open up their code for customer inspection. If that happens, their hardware becomes commoditized and the main buyers will be cloud-hosting firms like Amazon and Microsoft and Google…who already can negotiate very low prices, by volume buying, and make an increasing amount of their own hardware. Dell and BlackBerry will lead the wave of adoption, and companies who need to secure financial accounts and other vital data, will buy those services to stay safe.

    The timing of the Equation Group story could not be worse for Cisco Sytems. It puts their business model in question, exactly as they are rewriting it.

  3. edinvests says:

    Having been in Silicon Valley for decades and working for major companies, my take is that virtually all of them needed to cut 10% if not more. Companies tend to go too many directions and have projects in design that eat money and have high headcounts, so I applaud one that takes action and cuts expenses that are getting them nowhere. I see it as a huge positive for Cisco and commend them for taking action to do layoffs and get things back to something they can manage far better. We should worry more about the companies that need to cut but are afraid of the backlash. I have never seen a layoff that did anything to hamper company growth, but boy did it ever make productivity go up and the core business never missed a beat.

    • Priscilla says:

      Wow too much said here. It is real enough to know that you applaud layoffs is something kind of heartless. What about the employer families and just that employer well been. What if it was you who the layoff affected would you honestly feel like the company “the core business never miss a beat”. In order for a company to be as successful as Cisco, it needs hard workers to be able to secured in coming to work knowing they got a good job/career. Take a look at the show Under Cover Bosses on the OWN. Channel then go due whatever position you think makes the company better by cutting it. And if you still feel the same way you feel then may ALLAH GOD JESUS VIRGINS MARY OR WHO OR WHAT YOI PRAY TO DAILY BLESS YOU

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