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July 8, 2011
Today is the last day at work for a still-undisclosed number of Cisco Systems Inc. (Nasdaq: CSCO) employees who have opted to take the company's early retirement package, industry sources tell Light Reading Cable.
In May, speculation spread that Cisco could cut as many as 4,000 jobs, or about 6 percent of its full-time employees. It's still unclear how many Cisco employees will be part of this round, but one source says the losses do extend to the old Scientific Atlanta unit and could be substantial. (See How Deep Will Cisco Cut? )
CRN reported Friday that Cisco employees had until June 24 to decide to take the package. Sources say eligible employees were those 50 and older whose age plus years of service totaled at least 60. They're in a position to get one year in severance pay, with Cisco also providing two years of medical coverage, a source said.
Executives ranked vice president and higher were ineligible, as were Cisco Distinguished Engineers and Fellows, CRN reported.
Cisco wouldn't confirm any details of the package. A spokeswoman said more information about layoffs and the company's plan to shed expenses will be discussed during the company's fourth-quarter earnings call, set for Aug. 10.
The voluntary retirement packages tie into Cisco's plan to chop $1 billion in expenses this fiscal year, which ends July 31, a plan that has already seen the demise of the Flip video camera. During Cisco's third-quarter earnings call in May, Chief Operating Officer Gary Moore noted that the company intended to communicate its layoff plans "by the end of summer." (See Cisco Preps for Layoffs, Cisco Flips on Consumer Business and Cisco Signals Major Restructuring.)
With the early-retirement window closed, any sort of future alternative will probably be a lot less enticing. Multiple sources say that Cisco isn't expected to extend a similar offer if it's forced to make deeper, wider cuts later this year.
But recent history suggests that most of the Cisco employees who are eligible for the program likely pulled the trigger. Cisco extended a similar early retirement offer about two years ago and, according to a source familiar with it, a large majority of the employees who were eligible opted for it.
— Jeff Baumgartner, Site Editor, Light Reading Cable
Senior Editor, Light Reading
Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.
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