Cisco to Cut Up to 700 Jobs in San Jose
The cuts are "part of 2,000 positions CEO John Chambers had forecast in February would be eliminated from Cisco's global work force of about 66,560," said the Mercury News.
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"It's companywide and it will [affect] multiple departments," the source said. Some employees tagged for layoffs could find work in other Cisco departments.
For its third quarter, which ended April 25, the maker of networking technology reported a profit of $1.3 billion on sales of $8.2 billion. Profit was off 24 percent from the same quarter last year, while revenue fell 17 percent. In a call with analysts, Chambers said the decline in customer spending appeared to have leveled off, which he characterized as a first step before the economy can begin to recover.
The company will report its fourth-quarter financial results on Aug. 5.
In a statement, Cisco declined to say how many workers would be laid off but called the action a "limited restructuring." It added, "We are sensitive to the impact these decisions have on employees during this challenging economic environment. We are doing everything possible to minimize the impact on employees affected by the limited restructuring."
An analyst quoted in the article said Cisco has historically been "reluctant" to lay off employees. When revenue and profit are down this much, stockholders expect some realignment and tightening of the belts. Unfortunately, it's the employees of Cisco who are hurt by these pressures.