John Chambers does not get his tax holiday so 6,500 are fired & Mexico picks up another 5,000

Chief Executive Officer John T. Chambers has led the charge

 for the tax holiday, which would be the second since 2004.

He says it would encourage companies to “repatriate” as much as

$1 trillion held abroad, spur domestic investment and create jobs.

By: Benjamin Pimentel
7/18/11

SAN FRANCISCO (MarketWatch) — Cisco Systems Inc. announced Monday that it plans to cut 6,500 employees, as part of efforts to lower costs.

The tech bellwether also said it was moving another 5,000 jobs to Foxconn Technology Group, as part of a sale of its manufacturing facility for set-top boxes in Mexico.

The company said the cuts include 2,100 employees who opted to take part in a voluntary early-retirement program. The plan also includes a 15% reduction of employees at the level of vice president and above.

Cisco also said that it has agreed to sell its set-top box manufacturing facility in Juarez, Mexico to Foxconn Technology. The sale would mean that 5,000 of the facility’s workforce will become Foxconn’s employees in the first quarter of fiscal 2012, according to the company.

The maker of networking gear recently embarked on new initiatives to reduce annual costs by $1 billion.

Analysts had been speculating that Cisco would drastically cut its workforce, with reduction estimates ranging from 5,000 to 10,000 jobs. “No surprises, but part of the healing process for Cisco to get back up on its feet,” Gleacher & Co. analyst Brian Marshall said of the announcement.

Shaw Wu of Sterne Agee also called the news “painful steps in the right direction.” “This should help lower overhead and allow the company to be more competitive in the marketplace,” he said.

Marshall at Gleacher added there had been rumors that Cisco was considering selling the Juarez facility.

But Wu pointed out the sale was a surprise — “a pleasant one, I would add, because it’s always tough to see people lose their jobs. At least now they will be at Foxconn. … Cisco really shouldn’t be in the business of manufacturing, as they are a designer and marketer of products.”

Over the past few months, Cisco has shut down its Flip video-camera business and moved to simplify its business operations through a “streamlined operating model.”

John Chambers (Cisco) to fire 10,000 and still wants a tax holiday to create jobs

"Mamas Don't Let Your Babies

Grow Up to be Cowboys"

Make 'em be CEO's and politicians and such

Encourage and guide them to be CEO's of America's finest corporate institutions. You know, the ones that snuggle up to our D.C. elected "representatives" under the pretense of assisting them to write policies and tax code that will create investments and employment in the United States. You know, the pretty boys and girls paraded around the CNBC set talking the talk, pushing their agenda. The are the likeable ones and you never see the knife until it is planted deeply and firmly in your back. 

Welcome to the way America does business.  

Cisco Systems Inc. Chief Executive Officer John Chambers earned $18.9 million in total compensation in fiscal 2010, ($51,780 per day) more than double his earnings the previous year.



July 2011:
Cisco Systems has cut its income taxes by $US7 billion ($6.7 billion) since 2005 by booking roughly half its worldwide profits at a subsidiary at the foot of the Swiss Alps that employs about 100 people.

Now Cisco, the largest maker of networking equipment, wants to save even more by asking US Congress to waive most federal taxes due when multinationals bring such offshore earnings home.

John Chambers, has led the charge for the tax holiday, which would be the second since 2004. He says it would encourage companies to ''repatriate'' as much as $US1 trillion held abroad, spur domestic investment and create jobs.

Bloomberg July 11, 2011

Cisco Systems may cut as many as 10,000 jobs, or about 14 percent of its workforce, to revive profit growth, according to two people familiar with the plans.

The cuts include as many as 7,000 jobs that would be eliminated by the end of August, said the people, who asked not to be identified because the plans aren’t final. Cisco, based in San Jose, California, is also providing early-retirement packages to about 3,000 workers who took buyouts, the people said.

Eliminating jobs will help Cisco wring $1 billion in expenses in fiscal 2012, the company said in May. Cisco expects costs of $500 million to $1.1 billion in the fiscal fourth quarter as a result of the voluntary early retirement program, it said in a quarterly filing.

“We will provide additional detail on the cost reductions, including layoffs, on our next earnings call,” Karen Tillman, a spokeswoman for Cisco, said in reference to an earnings call scheduled for early August. She declined to discuss job cut figures.

Trimming about 5,000 jobs would reduce operating expenses by about $1 billion annually and boost 2012 earnings by about 8 percent.

Michael Pento: John Chambers will never learn

Thursday, November 11, 2010
By: Michael Pento

Cisco’s stock is down $4.16 or 17% in the pre-market this morning after the company said that fiscal second-quarter profits excluding some items will range between 32 cents and 35 cents a share, less than the average analyst estimate of 42 cents.

I point this out because Mr. Chambers is emblematic for why the average investor has lost faith in the market. On February of this year, the Chairman of Cisco said, "...we are entering the second phase of the economic recovery." He also said in the same interview that the company is ..."hitting on all cylinders...and hiring big time."

Then in June he had this to say about the prospects for his company, “"What you see us doing is planting the seeds again and again that will allow growth to comfortably be ... 12 to 17 percent," he told a Sanford C. Bernstein conference in New York.

However, today he warned in a CNBC interview that the company “hit an air pocket that was unforeseen.” But that’s the point Mr. Chambers. You have the responsibility to your shareholders of restraining your enthusiasm and tempering your comments. The hard truth is that your stock price is the same today as it was in 2006 and as it was in 2001. With no dividends given during that period, investors would have enjoyed the same benefit as putting their money under the bed as investing in CSCO shares.

Flash crashes, Bernie Madoff, and the Internet and Housing Bubbles have served to crush consumer appetites for investing during this past decade. John Chambers shouldn’t seek to add to that incredulity on the part of investors. But rather to bolster and placate those fears by increasing his own trustworthiness and accuracy, even if he can’t increase his stock price.

Michael Pento, Senior Economist at Euro Pacific Capital is a well-established specialist in the “Austrian School” of economics. He is a regular guest on CNBC, Bloomberg, Fox Business, and other national media outlets and his market analysis can be read in most major financial publications, including the Wall Street Journal. Prior to joining Euro Pacific, Michael worked for a boutique investment advisory firm to create ETFs and UITs that were sold throughout Wall Street. Earlier in his career, he worked on the floor of the NYSE.

CSCO Whines About Taxes and Dumps Shares (Mike Shedlock)

By Mike Shedlock
Mish's Global Economic Analysis11/11/10

Cisco was hit in afterhours trading on Wednesday following a rare revenue warning. Futures are down but dip-buying strength has been so insane lately that one must wonder if there will be any follow through.

Regardless of what the stock does, the huge warning may portend the end of the ramp in capital spending on technology by corporations. If so, what's left of the recovery (if anything) is all on the backs of consumers.

While pondering that grim setup, please consider Cisco Forecasts Fall Short of Estimates; Shares Slide

Cisco Systems Inc., the largest maker of computer networking equipment, forecast sales and profit for this quarter that fell short of analysts’ estimates, sending the shares down as much as 15 percent in late trading.

“There’s no reason to think that that’s going to reverse quickly,” said the San Francisco-based analyst, who still advises buying the stock. “This is kind of a deteriorating situation.”

The company is seeking other ways to reward investors. Cisco said in September it will initiate its first dividend, starting in the fiscal year that began last month. The size and timing of the payout will depend on tax laws and repatriation policy, because much of Cisco’s cash is abroad.

Tax Laws

Chambers, 61, has said that he wants to bring at least $30 billion in cash back to the U.S. and that tax laws make it too expensive to do so. He’s called for a tax repatriation break, saying Cisco will increase its U.S. headcount by 10 percent if a favorable law is passed.

Spare Me The Whine

I am not a fan of corporate taxes. However, I am less of a fan of allowing giant corporations send jobs and cash overseas, then beg for a repatriating holiday, lather-rinse-and-repeat. Complete Article