When Cisco Systems Inc. (CSCO) earlier this month reported a 27 percent profit drop, it was refreshing not to hear direct references to layoffs. The networking giant is considered a leading indicator when assessing economic stability, making the absence of doom-and-gloom proclamations most welcome.
Well, looks like we got our hopes up too high because Cisco CEO John Chambers’ definition of layoffs apparently is not the same as ours. For him, any notable layoffs have to equal at least 10 percent of a company’s employee base. Cisco has 64,000 workers and confirmed this week it will axe up to 2,000. About 250 already were cut on Tuesday at Cisco’s San Jose headquarters, and in some U.S. and overseas offices.
Cisco is trying to couch the layoffs as “a targeted realignment of resources,” but come on. There’s no room for euphemisms and sugar-coating in this recession.
The company will continue working to reduce operating expenses by $1 billion over the course of 2009. In addition to layoffs, Cisco intends to save money by freezing salaries and all but nixing corporate travel.
On a sad note, Cisco is losing its executive vice president of worldwide operations and business development. Richard Justice told Cisco on Feb. 23 that he is stepping down from his full-time role because of prostate cancer. Justice plans to work part-time as an executive adviser, for which he’ll receive $200,000 per year and retain most of his benefits. Robert Lloyd, senior vice president of U.S.., Canada and Japan operations is expected to succeed Justice.