Cisco announced it would end its Flip portable video camera business in a restructuring move that will include exiting other parts of Cisco's consumer businesses and reducing the company's headcount by 550 workers.
Consumer products have been a recent drain on Cisco, a US$40 billion company that dominates the switching and routing world. Cisco executives had ambitious plans for video, including consumer video and the Flip, beginning three years ago, even though it was considered an unusual move for the infrastructure maker to plunge into the consumer world.
Last week, CEO John Chambers said the company needs to cut expenses by half, three days after issuing a candid memo to Cisco's 73,000 employees about coming reforms.
Chamber's plan include re-focussing Cisco on five key areas: core routing, switching and services; collaboration; architectures; video; and data centre products.
The decision to exit some consumer businesses means that the remaining consumer areas will be taken over by four of the five priority areas except for data centre. The move will result in 550 job reductions coming in the fourth quarter, none in New Zealand.
"[Flip] was an interesting and active part of our business in New Zealand but ultimately a very small part of our revenue," says Geoff Lawrie, Cisco's New Zealand country manager. "We have one person locally focused on our entire consumer and retail portfolio -- including Linksys -- and currently we do not expect any change in this area, other than a tightening of focus."
Cisco's Home Networking business will be refocused, according to the company's statement, "for greater profitability and connection to the company's core networking infrastructure." Products in that area will still be sold in retail channels.
Cisco's Umi home telepresence line will be integrated into Cisco's Business TelePresence line and will be sold through an enterprise and service provider approach, although Cisco didn't elaborate on how that would work. Cisco also didn't say whether Umi consumer products would continue to be sold.
Cisco said it would "assess" whether to integrate the Eos media solutions business or find other market opportunities for that business.