Is Cisco Hiring Or Firing? It's Doing Both

Cisco CEO John Chambers

Photo: AP Images

Remember last month when Cisco laid off 2% of its workforce, or about 1,300 people? We also reported that more layoffs could come — as much as 5% of the workforce, sources say.Cisco executives yesterday did hint that more cuts are coming, at least in the U.S. But, Cisco is also hiring — mostly overseas workers and entry level positions — particularly interns.

Cisco CEO John Chambers explained last night in an interview on CNBC with Maria Bartiromo.

MARIA BARTIROMO: Do you have to resize the business in any way? What changes do you need to make to offset this weakness coming out of the Eurozone?

JOHN CHAMBERS: I think we can answer that, Maria, in terms of where we added our headcount this quarter. We added 1,400 people this quarter, 500 were college graduates that we’ll put through intern programs, etc. 700 were in emerging markets. So if you look at where we’re looking for our growth, emerging markets is one of the three, followed by commercial, followed by service provider. So we have to move resources to where 50 per cent of the world’s GDP is and where only 20% of our business is currently.

This followed statements made earlier in the day by Chambers and CFO Frank Calderoni during the quarterly analysts conference call. Calderoni spelled out exactly where the new hires worked and gave another veiled warning that more cuts could be coming.

FRANK CALDERONI: Our headcount at the end of Q4 totaled 66,639. That was up approximately 1,410 quarter-over-quarter. The additions are strategic including approximately 500 new university graduates, who were hired in Q4 mostly in engineering to approximately 300 additional hires in R&D and growth areas such as data centre and approximately 330 in services to fulfil customer contracts.

From a geographic perspective, over half of the headcount added this past quarter were in emerging markets and other growth markets. We routinely review our business to determine where we need to align investments based on growth opportunities. Additionally, we continue to evaluate our organizational structure as part of our plan to drive simplicity, speed of decisions, as well as agility across Cisco. If we decide to exit or reduce investments in a business, we will have to make associated decisions that could impact our workforce.

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