Cisco Thinking Layoffs, and So Should You

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Cisco Systems announced another round of layoffs as it moves to trim its global workforce and remain agile. Other vendors are going through the same motions. In many regards, this isn’t a bad thing; all companies should regularly evaluate their expense structure – including labor.

Cisco Systems has done a remarkable job transforming itself after flirting with the brink just a year ago. The networking giant trimmed more than $1 billion in expenses through a series of product eliminations and the downsizing of 11,500 jobs. The result: a return to profitability.

Yesterday’s announcement that Cisco is laying off 1,300 employees – roughly 2 percent of its global workforce – came as a bit of a surprise. Why would a healthy company eliminate jobs? Short answer: to trim expenses, adjust strategic plans and reinvest.

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Just because Cisco is eliminating jobs doesn’t mean Cisco is eliminating jobs. In fact, there’s a strong possibility that the downsizing and restructuring will result in more jobs being created.

The cradle-to-grave employment paradigm ended a long time ago. The days when companies could support the same jobs and sustained career tracks for decades is rare, particularly in hard skills like engineering, programming and technical support. As the technology and market dynamics change, so to do corporate needs for people. And it’s not just what people do, it’s where they’re located that makes a difference.

Eliminating jobs is a painful process, but it often results in the freeing of resources that enables companies to make strategic investments for future growth in new markets. And that results in more job creation.

As of this morning, Cisco is listing more than 1,400 job requisitions on its careers site, and 46 percent of them are in the United States. These jobs aren’t low-paying assembly work or facilities maintenance, but well-paying professional jobs in sales, engineering, finance, marketing, operations and sales.

Cisco isn’t the only technology company going through painful job eliminations. Hewlett-Packard accounts for more than half of the lost technology jobs in the first half of 2012 as it’s begun the long process of eliminating more than 27,000 jobs to restructure its operations. Despite this downsizing, HP is listing nearly 4,000 jobs on its careers site.

Best Buy’s Geek Squad is reportedly eliminating 600 jobs as the company restructures for cost containment. Channelnomics hears that Geek Squad is simultaneously hiring 500 technicians with broader and more sophisticated skills as the support service evolves its capacity to meet the IT needs of its future business customers.

Solution providers often fail to think in the same manner, holding on to staff and infrastructure resources long after their utility has evaporated. During the managed services evolution, VARs reported that the biggest transformation obstacle wasn’t the technology or the delivery model, but rather the elimination of legacy jobs. Too often, solution providers look at the people, not the positions in their managerial decision-making. After all, it sounds more than callous to say you need to layoff “Jim, the guy who’s worked for you for the last decade.”

Pointing at a layoff announcement and assuming the worst is easy. Oftentimes, it’s a sign of strategic intent and evolution. Every business – vendor, distributor, service provider and solution provider – needs to regularly review their expenses, look at their staffing and competencies, and adjust their capacity accordingly. It’s just too expensive to carry legacy while investing in future realignments.

Eliminating jobs is hard. Worse, though, is carrying increasingly nonproductive and lower value jobs that lead a business to irrelevancy.

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