Original URL: http://www.theregister.co.uk/2009/04/14/cisco_layoff_rumor/

Cisco dismisses 'hefty' layoffs rumor

Smells not quite right

By Rik Myslewski

Posted in Business, 14th April 2009 18:59 GMT

Cisco Systems has dismissed predictions of a 10 per cent reduction in headcount from a JPMorgan analyst.

Ehud Gelblum has gone out on a limb and said Cisco “could” announce the 10 per cent cut and “could” save the company about $900m (£600m) a year through the move according to report by the Silicon Alley Insider. The Insider cites TheStreet.com. Let the whispering games begin.

In response to The Reg's request for clarification, a Cisco's spokesperson told us: "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 company wide. This does not represent a broad-scale layoff in our workforce."

In other words, Cisco would prefer that you pay no attention to the whispers. Please.

And some of the Insider's own readers are skeptical. One commenter doubted TheStreet's creds, adding Gelblum's analysis didn't pass the "smell test".

"Why exactly would a tech company, which lives and dies by the creativity of its workforce, cut 10 per cent of its staff when it has that cash pile in the bank," TimboM posted on the Insider's site.

Indeed. While 1,500 to 2,000 may seem as "broad scale" to some observers, it's significantly less than the 10 per cent predicted by Gelblum - when the company's second fiscal quarter closed at the end of this January, Cisco had 67,318 employees worldwide.

Although all areas of the tech sector are being squeezed by the ongoing Meltdown, Cisco is in a better position than most. At the end of that same quarter, the networking giant and new entrant into the server market had $29.5bn (£19.8bn) in cash - enough to prompt it to see 2009 as a good year for aquisitions.

In fact, when discussing Cisco's acquisition plans, the company's senior vice president of corporate development Ned Hooper said: "The downturn for us is a big positive."

Hooper, apparently, doesn't see himself among the 1,500 to 2,000 employees who'll be receiving pink slips "in the near term." ®