Cisco expected to guillotine more employees this Thursday

Heads may roll at Cisco this week.

Confirmed Cisco Layoffs 7/16/09: Cisco Israel fires dozens Cisco laid off up to 700 employees at its San Jose, California headquarters 80 employees at Cisco told they are losing their jobs at Research Triangle Park, North Carolina Unconfirmed Cisco Layoffs:

100 Cisco employees were let go in Austin, Texas.
The entire Cisco Tech Support organization in Europe has been given two months to find jobs.
Cisco employees terminated were around 90 in Buildings 100, 200 and 300 at the Boxborough, Massachusetts campus with more than that to be terminated in Building 500 - bringing the total terminated in the range of 200 for the entire Boxborough campus.
According to a Cisco source, "With these small layoffs added together, Cisco is approaching 8% or 9%. It appears John Chambers' 10% redefinition of a layoff was carefully calculated."

------------------------------------------------ Most thankfully, whenever I've stuck my neck out by climbing onto a flimsy limb, I've yet to be guillotined. However, possibly not so lucky this Thursday, July 16th could be the Cisco employees rumored to be losing their jobs, according to an email I received from a Cisco source. Last week, Cisco did a good job of denying further job cuts that Wall Street analyst Hasan Imam - Managing Director of the investment banking house - Thomas Weisel Partners, had reported as being imminent. Nonetheless, I definitely believe that where there's smoke, there's fire, so let's take a look at the Cisco headcount. As of April 25, 2009, there were 66,558 Cisco employees. Looking Back at the Cisco Headcount Tally:

Cisco Form 10-Q Filed with the SEC on May 20, 2009 (Page 50):

Headcount - During the third quarter of fiscal 2009, headcount decreased by approximately 760 employees, primarily as a result of employee attrition and the effects of a hiring pause, in addition to the effects of limited workforce reduction actions. Our headcount increased by approximately 430 employees in the first nine months of fiscal 2009, reflecting an increase in hires of college graduates in the first quarter of fiscal 2009 and acquisitions. As we realign and restructure resources in the normal course of our business, we expect that our headcount may continue to decrease in the near term.

Cisco Form 10-Q Filed with the SEC on Feb 17, 2009 (Page 48):

Headcount - Our headcount increased by approximately 1,200 employees in the first six months of fiscal 2009, reflecting a seasonal increase in hires of recent college graduates in the first quarter of fiscal 2009 and acquisitions. During the second quarter of fiscal 2009, headcount decreased by approximately 330 employees, primarily as a result of employee attrition and the effects of a hiring pause. As we realign and restructure resources in the normal course of our business, we expect that our headcount will decrease in the near term.

Cisco Form 10-Q Filed with the SEC on Nov 18, 2008 (Page 44):

Headcount - Our headcount increased by 1,518 employees in the first quarter of fiscal 2009, reflecting a seasonal increase in hires of recent college graduates, the effects of our investments in sales and R&D described above and increased investments in our service business and acquisitions. If we do not achieve the benefits anticipated from these investments, our operating results may be adversely affected.

Cisco Form 10-K Filed with the SEC on Sep 15, 2008 (Page 31):

Headcount - Our headcount increased by 4,594 employees in fiscal 2008, reflecting the effects of our investments in sales and R&D described above as well as increased investments in our service business and acquisitions. We expect our headcount to increase as we continue to invest in our business. If we do not achieve the benefits anticipated from these investments, our operating results may be adversely affected.

Revealingly, my source stated that Cisco will deny a job cut for the following 3 reasons:

1. Cisco won't confirm a job cut until it occurs - because it doesn't want to spook the cattle and end up causing a stampede.
2. Cisco defines a layoff as 10%, so a mere 2,000 is not anywhere near 10% (66,558 employees). If the exact denial was the word "layoff" then the Cisco fallback response is that it isn't a layoff, it's a restructuring.
3. Cisco has a randomly executed a policy of eliminating the bottom 5-10% of performing employees. It hasn't really acted on this policy with any consistency, but has verbalized it as existing. So, any elimination of Cisco employees could be spinned as "policy" and not as a layoff.

Is it just me, or am I detecting cynicism within the House of Cisco?


What's your take, will Cisco employees be sadly guillotined this Thursday? BradReese.Com Cisco Refurbished - Services that protect, maintain and optimize Cisco hardware Contact: Brad Reese | Twitter: http://twitter.com/BradReese

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