Cisco Slashes Jobs, Costs

Cisco Systems Inc. (Nasdaq: CSCO) today announced a broad cost-cutting plan that includes laying off at least ten percent of its workforce (see Cisco Announces Major Cuts).

The networking giant will eliminate 2,500 to 3,000 temporary and contract workers and cut 3,000 to 5,000 regular employees through "voluntary attrition, involuntary attrition," and consolidation.

Cisco expects to take a one-time charge of $300 million to $400 million by the end of the fourth quarter of fiscal 2001 to account for the workforce reduction.

Cisco CEO John Chambers said in a prepared statement that the actions were taken as a precaution, following signs of economic slowdown in the United States and other parts of the world.

The company also plans to cut costs in contract services, travel, and marketing expenses.

The company has roughly 44,000 regular employees. Although Cisco normally cuts about five percent of its workforce annually through a "performance management" program, more jobs are being cut this year than is usual, said a Cisco spokeswoman.

Analysts were not surprised by the action, give the recent earnings warnings and general slowdown in the U.S. economy.

"The cuts are not unexpected and should probably be seen as a fairly healthy culling of the weak and the lame from the herd," said Stephen Kamman, an analyst with CIBC World Markets. "The price of success for a big growth stock is that you'll someday grow big enough that you'll have to start doing what normal companies do."

-- R. Scott Raynovich, executive editor, Light Reading http://www.lightreading.com
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all-software-are-buggy 12/4/2012 | 8:47:03 PM
re: Cisco Slashes Jobs, Costs In the land of opportunties
one cisco does not create fatalities
In the land of freedom
abundance is choice for creation
It should be okay
to carry on the day...
lightsource 12/4/2012 | 8:47:01 PM
re: Cisco Slashes Jobs, Costs i don't know what was the source for such a dramatic subject line, but lay off is nowhere close to 8000. in addition to normal 5% attrition which happens anyway in Cisco, additional 2500 temp workers may be laid off.

Well, idea of having contractors is have flexibility during such tough times !!
DCITDave 12/4/2012 | 8:47:00 PM
re: Cisco Slashes Jobs, Costs The subject line -- Cisco Systems to eliminate as many as 8,000 temporary and regular positions in preparation for the slowdown -- doesn't state that Cisco is laying off 8,000 people.

It does say that jobs -- whether filled or not -- will be cut, though.

The piece is fine; no correction needed.

voyeur 12/4/2012 | 8:47:00 PM
re: Cisco Slashes Jobs, Costs Stop trying to pump up Cisco stock. Those figures came from Cisco. See below


Even if you take out the Temps (which some companies include in their reported headcount), 5,000 regular employees still amounts to 11% of their regular payroll. That's still slashing. Tell the 5,000 it's not slashing.

voyeur 12/4/2012 | 8:46:59 PM
re: Cisco Slashes Jobs, Costs Phil,

It's a shame you guys are so reactionary to your posters. Most of your article comes from the Cisco press release, and I am sorry, but when a company takes a one time charge of $300 to $400 million for the restructuring, it is a layoff.

No need to defend yourself on this one. On other articles, maaaaaybe.....

DCITDave 12/4/2012 | 8:46:59 PM
re: Cisco Slashes Jobs, Costs It's a shame that we respond to our readers? I beg to differ.

And I don't care if you call it a layoff, a restructuring, or (my favorite) an act of "involuntary attrition," the point was that the other poster wrongly felt that we'd overinflated the number of jobs in question. I responded to point out that we didn't.

You gotta problem with that?

captain kennedy 12/4/2012 | 8:46:52 PM
re: Cisco Slashes Jobs, Costs In the land of opportunity
It's plowin' time again! (Neil Young)
drone387 12/4/2012 | 8:46:51 PM
re: Cisco Slashes Jobs, Costs Layoffs don't look at individuals! The heck they don't. It's the time to settle political scores, unload the dead wood, etc. I've seen people on "safe" projects get bumped to make room for someone management values higher.
sntwk 12/4/2012 | 8:46:51 PM
re: Cisco Slashes Jobs, Costs What has H1 to do with Cisco lay offs. Why don't you take this topic somewhere else.

An employee is an employee whether permanent or H1. I am not aware if there is any targeting activity in lay-off. Usually they identify a product activity and judge purely on viability of that product/activity and close that group if not foudn viable. It is possible that some people in that group are very brilliant. But what I heard is that lay-offs don't look at individuals involved but the projects only.

Any case I suggest you don't discuss H1 related stuff here.

drone387 12/4/2012 | 8:46:51 PM
re: Cisco Slashes Jobs, Costs Isn't it classic that Cisco, et.al. finally got the H1-B limit raised right when the recession hits. They all institute hiring freezes and lay off 10% of their staffs. I can't wait to see all the politician who voted for it explaining that to the layed off techies. I wouldn't want to be a lobbyist trying to make the higher limits permanent now. From an academic perspective, it would be interesting to know if there is any bias for/against H1-Bs in the layoff process.

I wonder what happens to the Coyote Valley campus development now? What 20,000 new engineers?
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