Cisco Is Shuffling 25,000 Employees Around In A Massive Reorg

Resumes are flying out of Cisco like so many owls in a Harry Potter movie, sources in the Valley are telling us.

A huge reorganization of Cisco's routing and switching engineering business has been going on, affecting up to 25,000 employees. This involves some massive changes for the unit, which generated $21.7 billion in revenue, or 60% of the company's total 2013 revenue.

The engineering teams are being switched up under engineering chief Pankaj Patel. They are moving from individual teams focused on individual products to two big overarching teams with one group focused on software, the other on hardware.

We understand that top managers with the title of "general manager" will be going away, but the people under them, with the title "vice president" and "senior vice president" are not being particularly targeted. So, Cisco isn't totally slicing out middle management.

Still, sources tell us a lot of senior people have dusted off their resumes and are looking around. It's a particularly good time for network and infrastructure startups, so Cisco folks are in demand.

Back at the company, the object of the re-org is to get rid of all the little product "fiefdoms" that have cropped up under the product/general manager system at Cisco over the years. By putting everyone into two big groups, Cisco hopes people will work together and share more, making the whole company more nimble.

The reorg came from the recommendations of two separate consultants, one source told us.

But in the short term, multiple sources have also told us that there's a lot of confusion and frustration, particularly around budgets as each manager tries to figure out what funds remain and what are taken away. "This is to be expected with a major reorg," said one source.

Cisco hasn't publicly discussed the reorg much. Though it did say that it would be doing another round of layoffs in August. As we previously reported, this was the fourth year in a row that Cisco ended its fiscal year by telling employees to watch for pink slips. Those cuts, though, are expected to be company wide, not just from the switching/routing engineering unit.

Cisco execs said Cisco would also be hiring employees in some units. When the dust settles, Cisco expects its workforce to be 8% slimmer, or 6,000 fewer people.

Ultimately, though, our sources think this reorg should be good for Cisco.

We reached out to Cisco for comment and will update when we hear back.