Cisco Layoffs Actually a "Targeted Realignment of Resources"

Published on February 26, 2009
by John Paczkowski

Looks like that 27 percent year-over-year drop in net income Cisco reported earlier this month had dire consequences for its workforce. The company sacked several hundred employees this week as part of what it describes variously as a “limited restructuring” and “targeted realignment of resources.” Cisco (CSCO) defines layoffs as a minimum 10 percent reduction in workforce; hence, the silly euphemisms here.

It’s not yet known how many positions were “restructured/realigned,” but the company is said to have eliminated 250 at its San Jose, Calif., headquarters alone. More “realignments” are likely to follow until the company reaches the 1,500- and 2,000-employee figure cited by Cisco CEO John Chambers in a Feb. 4 call with Wall Street analysts.

“With the speed we are now moving on some of these fronts we will continue this normal process which in the near-term could result in a reduction of 1,500 to 2,000 jobs,” Chambers said at that time. “This is something we will continue to do in good and challenging times. I thought it was important to provide this level of detail especially to our employee family during these uncertain times. Many of you have asked us if we need to do a broad company lay off in order to manage our expenses. My own view is if you are going to do a lay off and we try everything possible to avoid them, it needs to be a critical mass to justify the loss of business momentum, impact on employees and disruption in key projects. Being very transparent, our definition of a company-wide lay off if we had to do one would most likely be at least 10% of our workforce.”

Cisco currently employs about 64,000 people. So even if it sacks 2,000 of them, it still doesn’t count as a layoff under its definition. That said, a layoff by any other name is still a layoff, no?

[Image credit: Someecards]

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