Cisco Cuts Up To 700 Jobs

Cisco Systems on Thursday cut between 600 and 700 jobs at its San Jose, Calif., headquarters, a source has told Channelweb.

The source also said that a smaller number of layoffs are expected at other Cisco offices domestically and abroad over the next few days.

Cisco on Thursday confirmed that it had cut jobs but would not specify how many or where the affected employees were located. Cisco also would not specify which departments within the company were affected by the job cuts. Cisco currently boasts around 66,000 employees globally.

"This limited restructuring is part of our ongoing, targeted realignment of resources and was previously discussed on our fiscal second- and third-quarter 2009 earnings calls," Cisco said in a statement. "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."

Rumors of pending layoffs have spread within Cisco this month. One source told Channelweb on Tuesday that Cisco would cut jobs this week.

On Cisco's second-quarter earnings call in February, Chairman and CEO John Chambers said the company would eliminate 1,500 to 2,000 jobs as part of its restructuring and cost-cutting efforts.

"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 on the second-quarter call. "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."

On Cisco's third-quarter call, Chambers specified that the number of jobs eliminated would be closer to 2,000.

In Cisco's third quarter, which ended April 25, the company saw a profit of $1.3 billion on sales of $8.2 billion. Overall, profit was down 24 percent year over year, with revenue declining nearly 17 percent from the year prior. Cisco is expected to report its fiscal fourth quarter earnings on Aug. 5.

During that third-quarter earnings call, Chambers said it appeared economic turmoil was starting to stabilize, though he added that that in no way indicated that the economic storm had passed.

"It has to level out before it gets better, we'll see," he said, adding that he was not predicting an immediate upturn. "I don't want to read too much or too little into it. It feels a fair amount better than just a quarter ago."

Before this week, 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. At the time Cisco did not say exactly how many jobs were cut, just that it was part of its "limited restructuring" effort.

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