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Cisco Lays Off Hundreds Of Workers

Some 600-700 employees in Cisco's headquarters got pink slips, part of an ongoing restructuring and cost-cutting effort.

Cisco on Thursday laid off 600-700 employees from its San Jose, Calif., headquarters, as part of an ongoing restructuring of its operations to reduce costs amid declining sales.

John Chambers, chief executive of the network equipment maker, told financial analysts in February that the company would likely lay off 1,500 to 2,000 employees across multiple departments. In May, Chambers told analysts the total number would like be on the high end of that range.

"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," the company said in a statement e-mailed today to reporters. "We are doing everything possible to minimize the impact on employees affected by the limited restructuring."

Cisco is calling the layoffs a "limited restructuring" to avoid having the firings categorized as a mass layoff. Chambers told analysts during the fiscal second quarter earnings call in February that "the definition of a company-wide layoff to me is at least 10% of your workforce."

"In very direct terms, we are not going to consider a layoff at this point in time," Chambers said. "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."

Cisco, which employs about 66,560 people worldwide, has reported declining sales in the last two fiscal quarters. Chambers said in May he believed the worst was over, but it may take awhile for sales to trend upward. The company is scheduled to report fiscal fourth quarter earnings Aug. 5.

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