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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deadfish2 12/4/2012 | 8:46:49 PM
re: Cisco Slashes Jobs, Costs
When it comes to laying off, does anyone know whether INS looks into who gets thrown out? I mean the H1 guy was hired because of shortage, now that the tide has turned, who gets thrown out first? The H1 guy or the US guy?
JS 12/4/2012 | 8:46:48 PM
re: Cisco Slashes Jobs, Costs I wanted to let you know that the figures listed here are way off. The # of employees effected and the amount of money it will cost the company is also off the mark by alot.

Anyone who wants the real story should read the times or go elsewhere for information. This story really says nothing, and what is does say is not accurate.
deadfish2 12/4/2012 | 8:46:48 PM
re: Cisco Slashes Jobs, Costs
I think all companies lie, specially in bad times! A few weeks ago it was only 2000, now it's 8000, a few weeks from now it's going to be 12000. Look at what Nortel, Motorola and others did, why would Cisco be any different?
flanker 12/4/2012 | 8:46:47 PM
re: Cisco Slashes Jobs, Costs
Since when is the Times accurate? Nobody reads the Times for business news.

You must be joking.
dingle_berry 12/4/2012 | 8:46:47 PM
re: Cisco Slashes Jobs, Costs That is an interesting question. I think that
the H1-Bs should be booted first and sent home
since they were only hired becuase "there were
no available US citizens" available to fill
the position.
The fact is the party is over. All of the high
growth rates that were predicted 1-5 years ago
are all bogus.
Now that the companies have the increase in H1-B,
along with the slowing growth, you can all kiss
your big salaries good by. Write your congressmen and tell them to pull a plug on this H1-B program!!
sntwk 12/4/2012 | 8:46:46 PM
re: Cisco Slashes Jobs, Costs It doesn't matter. People should line up in cisco to receive the pink slips, with 6 months pay as severance package!. If the worker is talented he/she should actually take the lay-off package and find another job in 3 weeks.
optical_funnybone 12/4/2012 | 8:46:44 PM
re: Cisco Slashes Jobs, Costs
optinuts 12/4/2012 | 8:46:38 PM
re: Cisco Slashes Jobs, Costs come on guys, quit the jingoism. cisco will put its business interests ahead of any other considerations. these corporations are global. lets lift ourselves a little higher for a change?
darth_cm 12/4/2012 | 8:46:31 PM
re: Cisco Slashes Jobs, Costs They knew this was going to happen. These companies are still grabbing visa and trying to get them permanent status to dilute the labor force and lower overall salaries. There never was a real shortage outside a few computer related fields.

Plus, most people fail to realize that many foriegners are very ethnocentric and have tremmendous loyalty to their friends back home. Some foriegners are in positions of great power in many tech companies and are trying to bring more over. Some are great workers but many are weak compared to the frequently and incorrectly slammed American engineer. On the other hand, US citizens are less biased, although the Reverend Jessie, J. and the Rainbow coalition, would have you believe that is what white have done. So, there is a variety of effects here. Besides, the comapnies still have enough money to bribe the politicians, so H1Bs and immigration will continue.

The moral. Start your own company with a better product, for a better price that the consumer must have and use the cheap labor to your advantage. Plus dig into the experienced older but effective workforce that is overlooked by corporate america that only wants to hire new grads or imports.
shawn 12/4/2012 | 8:46:17 PM
re: Cisco Slashes Jobs, Costs this is the familiar xenophobia that sweeps across whenever the economy takes a downturn and foreigners are a convenient scapegoat. lets keep cooler heads and we will all get thru' to better times.

The only thing that seperates the U.S from Europe
in the tech field is the steady stream of talented foreign workers it attracts. americans are kidding themselves if they think they alone were responsible for longest expansion in U.S history..
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