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Cisco rewards good staff behavior by firing them

We are not at home to Mr Competence

Networking outfit Cisco has a novel way of rewarding staff who turned around the company in the last year – it issues them with a P45 and a pink slip. Last year Cisco made $10 billion in profit and managed to buy back nearly $3 billion in stock and paid out more than that in dividends as well.

Profits were up 18 per cent in the most recent quarter and revenue rose by a small amount in the next three months. The company has $50 billion in cash in the bank. In otherwords it is doing really well in difficult conditions. Cisco boss John Chambers has decided that he will fire five per cent of the Cisco’s workforce or 4000 people just to make sure.

There is a slight problem with this. Cisco is telling people it is making record profits, but it is still firing staff as if it is about to go into Chapter 11. Apparently Chambers is worried that his outfit can’t generate the kind of growth that excites investors and he thinks the way to do that is to gut staff morale. 

According to Forbes the feeling is that if Chambers does that his staff will simply stop producing the results and leave the company for a place where their efforts are rewarded.

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