Cisco Kills Flip Camera, Lays Off 550 Employees

Cisco has flipped the switch on Flip.

As part of Cisco's plan to restructure the company, it will shut down several of its businesses and let go of 550 employees, according to a release.

In what it is calling a "comprehensive plan to align its operations," Cisco will close down certain parts of its consumer business to refocus on four of its "key company priorities," core routing, switching and services, collaboration, architectures, and video. The news comes on the heels of CEO John Chambers' remarks that the company would be taking "bold steps" to reorganize business.

Part of the move will include shuttering Flip, its video camera business, though the company says it will "support current FlipShare customers and partners with a transition plan."

Cisco purchased the maker of Flip video cameras, Pure Digital Technology Inc., two years ago in a $590 million deal.

"We are making key, targeted moves as we align operations in support of our network-centric platform strategy," said John Chambers, Cisco CEO, in the release. "As we move forward, our consumer efforts will focus on how we help our enterprise and service provider customers optimize and expand their offerings for consumers, and help ensure the network's ability to deliver on those offerings."

Shutting down consumer focused operations to move towards enterprise customers also means that Cisco expects to lay off about 550 employees by the fourth quarter of 2011.

Cisco also closed its email service for businesses earlier this year.

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Should Cisco have shut down its Flip camera business?

Yes, it was time.

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Comments

[garygaddy]

08:38 AM on 05/06/2011

Cisco stumbled on the Flip but their next move will be a winner:

Cisco/Crisco merger to produce slickest high-tech yet
http://garygaddy.tripod.com/blog/index.blog?from=20110429

[origamillama]

04:39 PM on 05/04/2011

This is so sad. I shot my entire short documentary on a Flip HD and it looks awesome. You can be so inconspicuous and take it anywhere. I was even hoping to start a Flip Film Festival. Check the quality yourself: http://www.youtube.com/watch?v=AUsups6Mk3I&
RIP, Flip.

[billypollina]

01:35 AM on 04/15/2011

Dumb move.

[adam smolkowicz]

09:08 AM on 04/14/2011

thats not good to hear

[Cut My Flix]

01:57 AM on 04/14/2011

Cisco did what they had to do. This is not uncommon it seems when companies try to enter a market and they are not prepared to do advanced expansion. Flip is a great product as illustrated by their competition. Millions of existing cameras are still in use, and will be for sometime. Their recorded video is much better in quality than any smart phone currently sold. In fact, I have a business that specializes in editing video from these "pocket" devices. Our simple, online transfer solution makes it easy to upload the movies for me to edit and deliver Blu-Ray's or DVD's. http://cutmyflix.com

[SirCoolBreeze]

03:42 AM on 04/14/2011

Yes, and it's easy to be a spamming d'head, too...isn't it?

[dennishastings]

01:51 PM on 04/13/2011

I love how almost every article about tech advancement is accompanied by the loss of hundreds of jobs.

When the tech world can figure out how to keep that from happening then they will own the world. Until then everyone is a possible unemployed person. Hey... try calling tech support for almost any company... 'support' has been replaced with pre recorded messages for all of your tech 'needs'. Good move.

[surely u jest]

12:15 PM on 04/13/2011

The real story here is that 550 now unemployed people who had no say in the matter will suffer for Cisco's Flip, flop. Oh and let's not forget US taxpayers who will ease CISCO's pain with $100 million in tax savings due to the business write-off.

Cisco's rationale for not selling the company probably has more to do with ego than financials since it was an all stock purchase. A new owner might turn the thing around which then makes a whole bunch of executives look bad. So, what penalty does the BOD impose on CEO John Chambers for overseeing this strategic misstep and poor use of capital? A $4.6 million 2010 bonus, a whopping 126% increase from the prior year. Nice work if you can get it.

It all sounds so perfunctory when you read the article. Calling this a "bold step" is nothing more than PR speak for another failed business strategy.

[ufgator18]

10:28 AM on 04/13/2011

I bought one right when they came out and was impressed~

Oh well.. they will surely become collector's stuff.

[BadWolf]

10:17 AM on 04/13/2011

I love my Flip video, I can't believe they are killing such a great product. I don't like using my cell phone to take video as it takes up too much memory and it's a great way to let my six year old take video without worrying about having my phone ruined. What a shame.

[MiaisAwesome]

05:58 AM on 04/13/2011

People want all in one devices to compliment their desktop computers and laptops. This product was doomed to fail because of the crappy quality and lack of ability to upload videos straight to YouTube or Facebook or video chat over wifi.

[billypollina]

01:34 AM on 04/15/2011

You clearly don't know what you're talking about as this is precisely what the Flip camera does. Eeesh.

[no repub ever]

02:23 AM on 04/13/2011

Love my flip. Works great in dimly lit rooms and takes 2 AA batteries. I was going to get the HD version too. Oh well.

[theveggiedude]

02:15 AM on 04/13/2011

Specs are not everything. Another product with no imagination bites the dust.

[Alan Sutovsky]

02:04 AM on 04/13/2011

They should sell off the company. There are many other companies out there that would love to develop this product and it's technology.

[MagicalPossibilities]

01:39 AM on 04/13/2011

I didn't even know Cisco made a camera. Not remotely close to their core business, so not surprised.

[artgenta]

12:44 AM on 04/13/2011

of course they're shutting it down. because when the battery dies u can't replace it! better to close it than face the dissatisfied and enraged customers left in the lurch...that's american business 4 u!

[DMSmith]

03:12 AM on 04/13/2011

Hmmm "no repub ever" commented as follows:
"ove my flip. Works great in dimly lit rooms and takes 2 AA batteries."
and even without that...bad design can be changed without closing the company if you have a basically good product.

[BadWolf]

10:21 AM on 04/13/2011

Have you ever actually ever used a Flip video camera? It takes 2 AA batteries that are very easy to change. It's a great product that a big company bought and has decided to kill.