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Let's just say the average salary is 70k which is very conservative. That is 14k * 70k annually lost from the local community, a grand total of 980M or let's j
by drawkbox 10y ago
Let's just say the average salary is 70k which is very conservative. That is 14k * 70k annually lost from the local community, a grand total of 980M or let's just say 1 billion annually.
Looking for another job when there are massive cuts like this also degrades the salary they accept on their next job because of the competition.
I wish companies, if possible, throttled layoffs a bit more instead of large chunks like this, but that is unlikely as the board/CEOs are looking for a stock uptick when they do and don't want to drag it out to affect the market value (translation: their own pay / stock value/price).
We rarely look at the amount of money lost in communities when things like this happen but it would be nice if reporters put out the lost community dollars/salaries along with the layoff number. The Great Wage Stagnation continues in our consumer driven economy.
- cm2187 10y agoIf the local community is the Silicon Valley, it should be able to absorb that pretty quickly. Thought there was a massive skill shortage out there.
- mdorazio 10y agoI know I'm cynical, but from what I've seen, the massive skill shortage is specifically for young, early career software developers willing to work for somewhat subpar wages. A 45 year old embedded systems manager would have a much harder time finding a new job.
- lazaroclapp 10y agoNot quite so clear. This is a layoff of 14,000 hardware or low-level networking systems engineers [1], not 14,000 front-end developers, it is not so obvious to me that the current Silicon Valley market is ready to absorb them so easily. Interesting to think those were the kind of jobs, and CISCO the kind of company, that once gave Silicon Valley its name. Makes you wonder how the market for software engineers, even adaptable always-learning hack-through-the-night-for-fun engineers, might look in 20 or 30 years. [1] Read "(low-level networking systems) engineers", not "low-level (networking systems engineers )"
- cm2187 10y agoI agree but they have a guaranteed job if they retrain. These are relatively smart and educated people. Retraining shouldn't be the end of the world. In my profession (banking), staff levels have been going pretty much consistently down since the financial crisis, as banks shrink or retreat from certain activities. But these are mostly bright, educated, business savvy people, who end up doing something else. For many it is a blessing in disguise, an opportunity (albeit in a brutal way) to move away from a shrinking industry to become their own boss or to work on the next big thing.
- bluedino 10y agoTrue, but most companies are going to look at them as no better than recent grads if they need to retrain. Imagine what a guy makes that's been at Cisco for 15 years? Now imagine what you can pay a recent graduate or H1B.
- cm2187 10y agoThey can retrain as big data specialists! No long term experts out there. A graduate with 1y experience is a veteran.
- thrwawy717 10y agoIt's not 14,000 engineers who are getting laid off. It is across all functions.
- eva1984 10y agoNot really. Depends on how many years they have stayed with Cisco and how old they are. If majority of the layoffs are senior people, they might find it is not that easy to find a good position out there. Those big firms are like walled garden, they made their own wheels, and outside world has moved on since way too long ago.
- tushar-r 10y ago> wish companies, if possible, throttled layoffs a bit more The uncertainty will cause a lot of stress. As a red badge at Cisco some years back, layoff talks used to cause me serious anxiety, even though my parent company would just move me to another project. The bigger problem with Cisco is that people speculate about layoffs and there are continual leaks. This really upsets employees, and causes considerable emotional pain for them.
- iofj 10y agoAs someone who made the mistake in working for an international office, and caught the train out almost 10 years ago now, I agree. I escaped one set of layoffs and then kept thinking I'm next. I was next. Got fired at end of financial year, along with a couple thousand others. Had a new job before the day was out (another result of said anxiety).
- gaius 10y agoGetting fired and getting laid off are very different things!
- fgonzag 10y agoAm I missing something? They are the exact same thing. The company decides to terminate your employment contract, as opposed to you making the decision.
- function_seven 10y ago"Fired" is used to refer to termination for cause. As in, you're being let go because you screwed up. Being laid off is termination without cause. You're just being let go as part of a workforce reduction.
- gaius 10y agoExactly - getting laid off means that the job you did no longer exists - it is unrelated to your personal skills, performance, productivity, etc etc.
- shangaslammi 10y agoIt's kind of strange that massive layoffs like these result in a stock uptick. At least for me it's a sign that the company is probably unhealthy and that its value is going to go down in the future.
- ndesaulniers 10y agohttp://www.cringely.com/2015/06/03/autodesks-john-walker-explained-hp-and-ibm-in-1991/ http://www.cringely.com/2015/06/03/autodesks-john-walker-exp...
- melling 10y agoThen short the stock. Long-term put options. What could go wrong?
- pjc50 10y agoYou're probably being sarcastic, but we just had the other day the problem with shorting: https://news.ycombinator.com/item?id=12294193 https://news.ycombinator.com/item?id=12294193
- melling 10y agoInvestors short all the time. Your comment seems to be irrelevant to the discussion. How about this famous short? Soros made a billion dollars. https://priceonomics.com/the-trade-of-the-century-when-george-soros-broke/ https://priceonomics.com/the-trade-of-the-century-when-georg... Did you see/read "The Big Short?" https://en.m.wikipedia.org/wiki/The_Big_Short_(film) https://en.m.wikipedia.org/wiki/The_Big_Short_(film)
- jpalomaki 10y agoMaybe the logic is that market is already aware that the company is not in good shape and this is reflected in the stock price. Massive layoffs tell the management is now also realising this and doing something about it, which is then thought to be a good thing. Another explanation could be that massive layoffs has caused stock uptick in the past and therefore it makes sense to bet that the same thing will also happen this time. (Of course this only makes sense for those who are first to react to the news)
- TekMol 10y agoCan money really "get lost"? I would think a dollar that otherwise would have been paid via salary to one of these 14k now goes some other way. Somebody else gets it. Somebody else can spend it.
- meira 10y agoIt goes to the stock owners pockets, not lost.
- forgetsusername 10y agoAnd they keep that money in their pocket, do they? On a personal level, this sucks for those Cisco employees. But it's weird that the land of disruption advocates "wasting" money on unneeded labour. There isn't much sympathy for the taxi drivers Uber is harming.
- gaius 10y agoThey keep it in an offshore tax haven, often.
- brianwawok 10y agoSo I own stock in most large companies through index funds. I want to someday retire and the government won't/ can't provide for me to life up to my standards. No offshore tax haven here.
- meira 10y agoUnfortunately, your case is not the majority. I believe free market would work if it was the case, but it is an utopia, like communism.
- adventured 10y agoHis case is in fact the majority, the radical majority. You couldn't be more wrong about how US investors store their wealth, it's almost entirely located within the United States, which is proven by estimates on domestic held wealth by the major banks, the Fed, and the Treasury. If you have something to dispute them with, let's hear it. Americans almost never use off-shore tax havens, because the IRS has no boundaries on chasing them down. US income is taxed globally, and the IRS will destroy you if you attempt to hide it from them and they find out, which they almost always do (they have direct or indirect access to nearly all global banking, financial transactions, stock transactions, bond purchases; they can also directly or indirectly get access to nearly all banks accounts in first world nations through treaties). There are very few countries where you can even attempt to hide your money from the IRS now, and most of those you'd be a fool to park money in.
- burntsushi 10y ago> I wish companies, if possible, throttled layoffs a bit more instead of large chunks like this, but that is unlikely as the board/CEOs are looking for a stock uptick when they do and don't want to drag it out to affect the market value (translation: their own pay / stock value/price). Have you ever actually been part of a company that did layoffs in chunks like you're suggesting? Experiencing that type of protracted wave of layoffs is not fun at all. In fact, it was down right miserable. Going to work each day with the threat of layoff looming over your head is an incredibly stressful experience. You might consider that there is more at play than just a few executives getting greedy about dollars.
- hinkley 10y agoI was in the first round of layoffs a couple years back and it was so nice. I got severance when their guilt to cash ratio is still high, no survivor's guilt, didnt have to worry about how to keep everything running with fewer backup people and a few missing experts, and I didn't have to worry about which round I would be in, or who else they would let go who made the job bearable.
- deleted 10y ago[deleted]
- forgetsusername 10y ago>We rarely look at the amount of money lost in communities One person's income is another person's expense. Which communities do you speak of?
- grondilu 10y ago> I wish companies, if possible, throttled layoffs a bit more instead of large chunks like this, When you amputate a limb, you want to do it as quickly as possible.
- radiorental 10y ago> When you amputate a limb, you want to do it as quickly as possible. When you throw the bathwater out, make sure you aren't loosing valuable resources. the best case scenario is to be really smart and constantly drain the bathwater such that the baby doesn't even notice the level dropping. Keeping the baby focused on the new shiny thing helps.
- gaius 10y agoYou mean stack ranking? LOL that doesn't work out how you want it to either...
- radiorental 10y agoNo I don't mean that at all. I work at a place where we surgically remove deadwood, keep valuable people & tech. Those who have value feel valued. As an aside I was with 3Com when they tried to go toe to toe with Cisco. 3Com did very much the same thing.. one major event was even called 'Catapult', senior management's intent was to launch the company forward, workers looked on with incredulity as over half the workforce lost their job in one day. 3Com never recovered.
- googletazer 10y ago>I work at a place where we surgically remove deadwood, keep valuable people & tech. Those who have value feel valued. I smell coolaid.
- radiorental 10y agoDam straight, nothing wrong with coolaid if it's good for you. Mid sized company(~3K), 30 years old, well above market pay, stellar benefits, 10-30% bonuses and a very family friendly culture. I don't blame them if they want to keep what works, people are smart enough to smell bs coolaid. There's never 'layoffs' and never ever entire groups let go. Just regular PIPs for people who you think... 'no great loss' I'll admit, doesn't scale to cisco though.
- r_smart 10y agoNot that it necessarily hurts your point, but your numbers are likely way off. The article doesn't say where the layoffs are coming from other than moving from hardware to software. I expect this means that they're firing some designers and largely manufacturing people, meaning the community most hit would be in Asia more than likely. Salaries there are a lot lower, so it wouldn't be as much of a gain for Cisco (though still the same kind of effect for the community effected). They also are probably shuttering some production facilities, which could save them a ton in capital costs, but again, could have a strong negative impact on the communities those buildings are in, depending on if someone else snaps them up.
- mathattack 10y agoI've been through throttled layoffs in the past. They're much much worse. 1) You're always looking over your shoulder, and can't think about long term projects or work. 2) The first people out (frequently the weakest performers) are able to find jobs the easiest, but by the time the better employees are also let go, the market demand has been filled. 3) It encourages and environment of non-cooperation. Employees cooperate more when they think they'll see each other again. If it's "there's 3 of us here today, and probably only 2 in a few months" then there are multiple incentives to not compete. Better to get it over with all at once wherever possible. Companies that need multiple rounds are usually either mis-run or in markets deteriorating extremely rapidly.
- mholmes680 10y agoI agree, its like being stuck in purgatory. Although, I disagree somewhat with your last statement -- in my experience, all throttled layoffs have been a result of acquisition synergies. The current one around me is by a market leader with a great past and excellent vision of the future. From my experience there's an easy way out of this: take control of your own career. Ask yourself: are these the conditions I want to work in? whats best for me; family; situation? Are there opportunities here while everyone else is looking over their shoulder?
- karma_vaccum123 10y agoBut when layoffs are as big as 14k, rarely are employees evaluated for individual value...it's usually entire business units or office locations that are closed. Throttled or not, the people exiting Cisco have likely already been picked...not much they can do about it in the meantime.
- mathattack 10y ago20% is a very high number, especially given how many layoffs Cisco has had. I've been in situations where 10% got laid off, and there were still weak performers who could be let go. This usually happens in cultures where it is very hard to fire people, so they use layoffs to cover for weak performance management. (And weak performance management can be a cause to need the layoffs to begin with)
- m52go 10y agoI 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.
- scotch_drinker 10y agoWill 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. http://www.recode.net/2016/2/10/11587764/cisco-soars-on-15-billion-share-buyback-plan http://www.recode.net/2016/2/10/11587764/cisco-soars-on-15-b...
- m52go 10y agoGood 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.
- Klinky 10y agoIt'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.
- draw_down 10y agoI definitely disagree, from the perspective of remaining employees morale. Doing a slow-drip of layoffs is the worst for employees because you basically have to constantly worry if you'll have a job in a few months.
- mankash666 10y agoUnlikely for all of it to be within the U.S.