Cisco is not ruling out layoffs

Cisco is not ruling out layoffs as it grapples with the worldwide economic downturn

Cisco is not ruling out layoffs as it grapples with the worldwide economic downturn.

The company will engage in a "realignment and restructuring of resources" in an effort to reduce costs that could result in the elimination of 1,500 to 2,000 jobs, Cisco CEO John Chambers told Wall Street analysts during a second quarter earnings call this week.

Cisco ended the quarter with sales down 7.5 percent and earnings down 27 percent from last year, yet still better than Wall Street estimates. Guidance for the third quarter, however, is somber: sales off 15 to 20 percent from last year.

In fiscal 2008 and the first quarter in 2009, Cisco "realigned and restructured" approximately 1,000 jobs. Further cost cutting, restructuring and realigning could result in the additional workforce reductions, but also may allow Cisco to avoid a larger scale layoff of 10% or more of a global workforce of 67,000.

But he also did not rule out such a move given the deteriorating state of the global economy. "We are not planning across the board workforce reductions," he told analysts on the call. "We are not going to consider a layoff at this time. We may be able to avoid large scale downsizing events," he said.

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Jim Duffy

Network World

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