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Cisco's RTP campus escapes most cuts in 'limited restructuring'

Posted February 26, 2009

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— The Triangle’s hard-hit high-tech business community isn’t taking a big hit from a round of cost-cutting at Cisco Systems.

Fewer than 30 of the 3,700 full-time employees at Cisco’s Triangle campus are being affected by what the company calls a “limited restructuring,” WRAL has learned. Cisco (Nasdaq: CSCO) also has some 800 contractors working in RTP.

The job losses could turn out to be even smaller since those workers affected will have time to apply for other positions within the company. Some also could be redeployed, based on their skills.

The latest Triangle employment numbers as provided by Cisco show that the company’s North Carolina presence has actually increased over the past two years. In 2007 and 2008, Cisco said it employed around 3,200 people locally.

IBM, Lenovo, Nortel, GlaxoSmithKline, Sony Ericsson and NetApp have all cut or are in the process of laying off workers.

Cisco would not comment on the record about any job actions in the Triangle. The N.C. operations focus on development, services, sales and information technology business units.

Company wide, however, Cisco has said between 1,500 and 2,000 people would be affected by job cuts. On Wednesday, Cisco confirmed that 250 workers faced losing their jobs at the company’s headquarters in San Jose, Calif.

Job reductions are being made around the world among Cisco’s work force of some 67,000 people.

Jobs were cut at several Cisco locations, according to the Wall Street Journal.

“Cisco is constantly evaluating its business priorities, resources and overall employee alignment as part of our business management process," a Cisco spokesperson said in a statement provided to WRAL Local Tech Wire and WRAL.com. "This limited restructuring is part of our ongoing, targeted realignment of resources and was previously discussed on our fiscal second quarter 2009 earnings call."

Cisco had earlier disclosed plans to cut expenses by $1 billion in 2009.

In the Feb. 4 conference call, Chambers declined to describe the latest restructuring as layoffs.

“Also in the spirit of complete openness, we are constantly realigning and restructuring resources as a part of our normal business process,” he said. “As an example, in fiscal year 2008 and the first quarter in 2009, we realigned and restructured approximately 1,000 jobs of a global workforce of 67,000 employees.

“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,” he added.” 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.”

Asked specifically about layoffs, Chambers added:

“Many of you have asked if we would consider a broad scale layoff in order to manage expenses. 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. Being very transparent, the definition of a company-wide layoff to me is at least 10 percent of your workforce. 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.”

10 Comments

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  • CrewMax Feb 26, 2009

    Interesting that John Chambers has now reached the level of "one name icon." They didn't bother to give his full name? Amazing
    reporting!

  • bobboyd7 Feb 26, 2009

    30? That's a cruel joke. I know first hand that it's a lot more. Over 750 in the CDO (Central Design Office) and about 1,500 company wide. How many in RTP? That's very hard to say. There were more than 30 in one of the 15 buildings. And yes, there are new jobs open, but only a small fraction of the count that "weren't laid off."

  • EasyU Feb 26, 2009

    lornadoone said: "How interesting. My boyfriend works at Cisco RTP and far more than 30 people were told they would need to find new jobs!"
    Like many IT companies, Cisco employs a lot of contractors, both in the US and abroad. Letting contractors go (on a quarterly up-tick/down-tick basis) is standard practice and does not have to be officially "announced" as a layoff. It is business expense. PR-wise it means you can proclaim your strength in a challenging market by claiming employee retension. As another poster said previously, they have an excellent PR machine.
    I suspect many of the folks losing their jobs at Cisco RTP campus fall into this category.

  • IdoNOTliveinDurham Feb 26, 2009

    I thought Obama was going to fix all the offshoring of jobs with Taxation?

  • Demented Feb 26, 2009

    lornadoone is right. My neighbor is currently training Indians to take over his Cisco job in a few weeks. Probably not the end of this practice... and that goes for all companies.

  • lornadoone Feb 26, 2009

    "Well, I have a friend that just finished a grueling 6 month training with Cisco and he has already been assigned his position in Tampa. Fl. Glad to see a company holding on to it's vested employees as well as it's new ones!"

    Don't speak too soon about that...

  • Journey985 Feb 26, 2009

    Well, I have a friend that just finished a grueling 6 month training with Cisco and he has already been assigned his position in Tampa. Fl. Glad to see a company holding on to it's vested employees as well as it's new ones!

  • oyid Feb 26, 2009

    Ha ha...Cisco is always on the ball even when they are caught up in the crisis. They don't have lay-offs, it's called attrition...performance lay-off. Very smart and Chambers is very effective CEO. How come others can't be like him? He's a very down-to-earth executive. He runs the company like a home...you take care of it. The PR is outstanding.

  • lornadoone Feb 26, 2009

    How interesting. My boyfriend works at Cisco RTP and far more than 30 people were told they would need to find new jobs!

  • computer trainer Feb 26, 2009

    Way to go CISCO!!! Appreciate your being here and all the great jobs that you have added to the area. Also appreciate the great employees that you have. Thank you for being here and staying here.