ECON - Cisco cuts hundreds of RTP jobs

greenspun.com : LUSENET : Current News : One Thread

Cisco Cuts Hundreds of RTP Jobs; Slows Expansion

RESEARCH TRIANGLE PARK (WRAL) -- Technical giant Cisco Systems is about to get a little smaller. The company has announced sweeping layoffs Thursday.

Hundreds of employees will be affected at the company's campus in Research Triangle Park.

The Workers: Cisco tells WRAL-TV that it will be laying off 392 workers at its RTP campus; 8,500 employees will be let go companywide.

The RTP layoffs include 292 full-time and 100 contract workers.

"It's like cutting off an arm," says Ed Carney, a Cisco site executive of the layoffs. "We build teams here in Cisco and pride ourselves in being the best in the business. Going through something like this is very difficult."

Those workers will receive up to six months severance pay and help finding new jobs. Carney says the company hopes these will be the only cuts required. Of those affected by layoffs, about 40 percent are in research and development, 30 percent in sales and 30 percent in support functions such as human resources and finance.

RTP Expansion Plans Slowed: Cisco is also trying to figure out what to do about a planned expansion in RTP. The RTP facility grew from 200 employees to 3,200 in six years.

Three of six new buildings will be completed by the end of the summer, but now there are no plans to move employees into them.

"Three of those building we are going to finish up," says Carney. "We have another three that we will complete the exterior shell, and then probably stop until things pick up again."

There are already nine buildings on the RTP campus that can accommodate up to 4,000 people.

The companywide cuts are the first in the Cisco's 17-year history. Cisco blames the move on several factors including interest rate increases, dropping sales in the telecommunications industry and the demise of dot-coms.

Taking Stock: Cisco's stock (CSCO) has taken a beating in the wake of the economic slowdown. Looking at the 52-week high and low, Cisco hit a high of more than $71 a share on May 1, 2000. The stock plunged to just over $13 a share on April 4, 2001.

-- Anonymous, April 30, 2001


Moderation questions? read the FAQ