I understand this isn't a good situation for the community, but what about the other side? That $980m isn't just disappearing into thin air.
CSCO will use it to refocus their efforts into more valuable services, which by itself will entail some level of hiring & investment, and if successful, they'll hire & invest more.
If you think this is an optimistic perspective, consider the alternative...CSCO continues employing people who aren't optimally productive for its goals, and ultimately the whole company runs into the ground and EVERYONE needs new jobs.
Layoffs are an unappealing and emotionally-charged but necessary part of the corporate lifecycle.
Will they? Or will they use to just do more buybacks? I'm not sure I trust any company to refocus after layoffs when they practically just announced a huge temporary gift to shareholders.
Good point. But even buybacks are taking that cash somewhere...it's the market's way of reallocating capital to a place it can be more productive.
It's hard to picture, since that cash is going from one entity (CSCO) to a lot of different entities (the market), but obviously CSCO thinks the market can make better use of that capital than it can.
The only thing that could be worse than what they're doing, in my view, is if they fired all these people and sat on their cash, AAPL-style.
It's unlikely they're going to hire on anywhere near the same number they layoff. Laying off a large swath of employees, only to have to go through a major hiring cycle is extremely inefficient. Finding the right employees is time consuming and expensive.
It seems more likely they'll keep the savings as a quick fix to make them look better to investors. As noted in the article, these rumors are coming out close to announcing their fourth-quarter results.
CSCO will use it to refocus their efforts into more valuable services, which by itself will entail some level of hiring & investment, and if successful, they'll hire & invest more.
If you think this is an optimistic perspective, consider the alternative...CSCO continues employing people who aren't optimally productive for its goals, and ultimately the whole company runs into the ground and EVERYONE needs new jobs.
Layoffs are an unappealing and emotionally-charged but necessary part of the corporate lifecycle.