Cisco cuts back

(Telephony) Despite claims last month that it would not cut jobs in response to the downturn in the telecommunications market, Cisco today revealed it will reduce its work force by at least 10% to address on-going changes in the economic environment.

The job cuts will include 2500 to 3000 temporary and contract workers, 3000 to 5000 regular employees through voluntary attrition, involuntary attrition and consolidation of positions. The reductions will occur throughout the remainder of the fiscal year. In addition, Cisco will reduce spending in marketing and travel expenses.

Last month, Cisco announced that it expected sales for this quarter to drop 5%--the first drop for the company in 11 years.

“We’re taking these steps because of the continuing slowdown in the U.S. economy and initial signs of a slowdown expanding to other parts of the world,” said Cisco President and CEO John T. Chambers in a statement issued today.

Cisco expects the slowdown in capital spending to last more than two quarters, Chambers said.

Such a cut is not surprising in the current environment, said Mark Lutkowitz, vice president of optical networking for CIR.

“Any good company is going to be asking ‘Do we really need the least productive 10%?’” he said. “It’s not a nice thing to say, but companies are always going to be revisiting that notion.”