Byte and Switch has learned that Cisco Systems Inc. (Nasdaq: CSCO) has laid off the majority of its storage router business unit, which hails from NuSpeed Internet Systems, the iSCSI router company Cisco acquired for $450 million in July 2000 (see Cisco to Acquire NuSpeed Internet).
About 50 of the 65 Cisco employees that started with NuSpeed were given pink slips yesterday, according to an insider familiar with the situation. "There's a small cadre of around 15 people who are going to stick around," the source says.
Cisco issued the following statement: "As a normal course of business... Cisco reallocates resources around the company to focus on profitable areas of our business. As this occurs, there may be very limited restructuring in some groups." The company refused to comment specifically on the cuts in the storage router division, which is based in Maple Grove, Minn.
The decision to axe this team has been expected for some time, and it became even more likely when NuSpeeds founders, Mark Cree and Clint Jurgens, resigned in January (see NuSpeed Duo Departs Cisco).
Cisco's rationale for laying off the rest of the team seems clear. NuSpeed faced a gamut of problems, economic and political, from the moment it was acquired by Cisco. Apparently, it was never able to overcome them.
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