In February, Cisco (CSCO) boss John Chambers said his cost cutting program was “in pretty good shape,” adding, “I would read into it more a level of confidence of not doing a major layoff across the board.”
Maybe not. In a note summarized by TheStreet.com, JPMorgan analyst Ehud Gelblum predicted today that Cisco could announce a 10% headcount reduction, which could save the company $900 million a year. Cisco could announce layoffs as part of its earnings report next month, another analyst told TheStreet.
Certainly plausible. While Cisco had almost $30 billion in cash at the end of January, Wall Street expects Cisco’s sales to fall 18% year-over-year in its April quarter and 20% year-over-year in its July quarter.
Update: A Cisco rep sends us this comment by email, which seems to deny an imminent, broad-scale layoff. At least based on what Cisco has already announced. Which doesn’t mean it can’t announce bigger cuts in the future:
“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 1500 and 2000 jobs company wide. This does not represent a broad-scale layoff in our workforce.
This limited restructuring is part of our ongoing, targeted realignment of resources. 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.”