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Lease Down: Cisco Cutting 11,500 Positions; Lockheed Martin Cutting 1,500

Other Downsizings from Harris Interactive, Extreme Networks and ITG
July 18, 2011
In a move to cut $1 billion in costs in its 2012 expenses, San Jose-based Cisco will reduce its global workforce across all functions by 6,500 employees, which includes approximately 2,100 employees who elected to participate in a voluntary early retirement program. In addition, Cisco is selling a plant in Mexico that employs 5,000 workers.

The 6,500 job layoffs represent a reduction of 9% of Cisco's regular full-time workforce. A deeper part of the cuts will come from its management ranks, where the company said it will reduce 15% of positions at the vice president level and above.

Impacted employees in the United States, Canada and select countries will be notified during the first week of August. The remainder of the global reductions are expected to occur at a later date.

In connection with this plan, Cisco estimates that it will recognize total pre-tax restructuring of $1.3 billion over several quarters, consisting of severance and other one-time termination benefits. Substantially all of these charges are cash-based.

Cisco also announced that it agreed to sell its set-top box manufacturing facility in Juarez, Mexico, to Foxconn Technology Group. The approximately 5,000 people employed at the facility will become employees of Foxconn in the first quarter of fiscal 2012 and no job losses are expected as a result of the sale.

Lockheed Martin Aeronautics To Eliminate About 1,500 Positions

Lockheed Martin plans to reduce employment by 1,500 positions across its aeronautics business area as part of a plan to improve the affordability of its products and increase operational efficiency.

Lockheed Martin currently has about 28,000 employees at its principal aeronautics sites in Texas, Georgia and California and at six smaller locations in as many states.

Worker reductions may occur across the enterprise, with the greatest impacts occurring at the larger sites. An organizational assessment will determine how to trim the organization with a target reduction of approximately 1,500 employees.

Harris Interactive Consolidating Facilities

Harris Interactive Inc. plans to reduce its leased premises at 101 Merritt 7 Corporate Park in Norwalk, CT, and at 1618 SW 1st Ave., Suite 250 in Portland, OR, and a third location in Brentford, United Kingdom.

Harris considered the Norwalk one of its material lease obligations where it is under lease for 14,200 square feet until May 2015. In Portland, Harris leases 2,700 square feet.

The market research firm known for its Harris Poll, plans to pursue subleases for the now excess space at each of these locations.

Harris said the action will result in lease exit costs of approximately $1.9 million that will be recognized principally in the fourth quarter of fiscal 2011.

It also said it will continue to evaluate its leased office space needs relative to the overall needs of the business. Harris has other primary U.S. locations at:
161 Sixth Ave., New York, until April 2012
60 Corporate Woods, Rochester, NY, until July 2015, and
5 Independence Way in Princeton, NJ until December 2018.

Extreme Networks Making Extreme Cuts

Extreme Networks Inc. in Santa Clara, CA, plans to cut 110 people or 16% of its worldwide workforce. The cuts will be coming in areas outside of R&D.

As part of the organizational changes, the company will be consolidating most of its software engineering resources into its current facilities in lower cost venues, and expects the consolidation to be complete by the end of the calendar year.

The actions are expected to lower its fiscal 2012 operating costs by approximately $20 million.

ITG Taking Measures to Cut Costs

Investment Technology Group Inc. (ITG), a New York-based agency research broker and financial technology firm, plans to cut costs to improve margins and enhance shareholder returns in the face of continued weakness in institutional equity trading volumes in the U.S. and Europe.

The company did not say how many jobs would be cut but did say the reduction plan is primarily focused on employment, consulting and infrastructure costs in the U.S. and Europe.

The plan is expected to generate pre-tax cost savings in 2012 of more than $20 million.

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