More Cisco Job Cuts Coming?

Cisco Systems reportedly is preparing to ax more positions this week as the company continues the job cuts and restructuring it first highlighted in its second-quarter earnings call in February.

Sources have told Channelweb.com that Cisco would most likely start slashing more jobs this week. It was unclear exactly how many positions could be eliminated.

A Cisco spokesperson would not comment Tuesday on the possible job cuts, saying the company does not comment on rumors and speculation.

The spokesperson, however, did note that any job cuts would fall in line with the restructuring efforts the San Jose, Calif.-based networking giant announced during its Feb. 4 earnings call.

"On our fiscal second-quarter 2009 earnings call in February, we discussed a limited restructuring where we could in the near term see a total reduction of between 1,500 and 2,000 jobs companywide," a Cisco spokesperson said in an e-mail on Tuesday. "This does not represent a broad-scale layoff in our workforce.

"This limited restructuring is part of our ongoing, targeted realignment of resources," the spokesperson continued. "While Cisco constantly manages its business priorities, resources and overall employee alignment as part of our overall business management process, 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."

Word of possible job cuts at Cisco comes on the heels of a report from analyst firm Thomas Weisel Partners last week that indicated Cisco would soon kick off a new round of layoffs. According to Reuters, Cisco said it is not in a new round of layoffs and instead the analyst report was referring to the 1,500 to 2,000 job cuts already under way that were mentioned during Cisco's second-quarter earnings call.

"The Thomas Weisel report today gives the impression that Cisco is announcing a new head count reduction of up to 2,000 jobs. That is not the case," Cisco spokesman Terry Alberstein told Reuters.

During that February earnings call, John Chambers, Cisco CEO and chairman, said Cisco cut about 1,000 jobs in fiscal 2008 and the first quarter of fiscal 2009 and more would follow.

"With the speed that we are moving on so many fronts, we will continue this normal process, which in the near term could result in the reduction of 1,500 to 2,000 jobs," Chambers said. "This is something we will continue to do both in good and challenging times, but thought it was important to provide this level of detail, especially to our employee family, during these uncertain times."

Chambers added that he doesn't believe that slashing 1,500 to 2,000 positions from Cisco's roughly 66,000 strong work force constitutes a layoff.

"My own view is that if you have to do a layoff, and we try everything possible to avoid them, it needs to be of critical mass to justify the loss of business momentum, impact on employees and disruption in key projects," he said. "Being very transparent, the definition of a companywide layoff to me is at least 10 percent of your work force. In very direct terms, we are not going to consider a layoff at this point in time. And while there are no guarantees, we think the odds are reasonable that if we execute effectively as outlined in this call, that we may be able to avoid large downsizing events."

Cisco's last confirmed round of job cuts came in February when the company eliminated a host of positions. At the time, Cisco confirmed that the first round of job cuts had begun with positions abroad and in the U.S. getting cut. Cisco did not say exactly how many jobs were cut, just that it was part of its "limited restructuring" effort.

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