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Cisco restructurings are over

CEO Chambers says company exceeded $1.5 billion cost reduction goal

By Jim Duffy on Fri, 08/07/09 - 11:10am.

Cisco is done with its limited restructurings -- those incremental workforce reductions, some of which evade public disclosure. The company exceeded its goal of reducing expenses by $1.5 billion in fiscal 2009, which ended in late July.

In a conference call with analysts this week on Cisco's Q4 and FY 2009 results, CEO John Chambers said the company completed its "major" expense reductions and limited restructuring. Cisco set a workforce reduction target of 1,500 to 2,000 in Q1 but Chambers said he expected the total number of reductions to be slightly higher.

In his remarks, Chambers said:

We are very pleased with our progress and aggressively managing our expenses, and exceeding our stretch goal of reducing our annualized expense run rate by $1.5 billion that he committed in the Q1 conference call. We have also realigned approximately $1 billion of resource to new market adjacencies and opportunities.

Later, he added:

Assuming there are no major surprises to our expectations on economic trends, we have completed our major expense reductions and limited restructuring. And we are now moving the entire focus of the company to growth, starting first with improvements in sequential order growth, followed by year-over-year growth.

Here's hoping the order growth Cisco saw in Q4 is an indicator that the entire industry is rising from the abyss of the global economic downturn. And that those 1,500 to 2,000 or more "restructured" ex-employees of Cisco, as well as those downsized from other companies, are re-engaged soon.

 

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