News

Cisco to hire 1,000 in U.S.

• By John K. Waters
• May 17, 2004

Silicon Valley seems to be getting a taste of the good old days. With the highly publicized Google IPO looming large, industry bellwether Cisco Systems last week announced plans to hire 1,000 workers. The San Jose Mercury News characterized the plan as the ''biggest surge in its workforce since the Internet boom.''

Cisco CEO John Chambers made the announcement during a conference call with financial analysts in which Cisco reported posted better-than-expected profit and sales. The world's largest maker of routers and switches posted third-quarter earnings numbers that included a $1 billion sales increase and a net income of $1.2 billion, or 17 cents per share.

''We are pleased to have achieved record earnings per share this quarter -- marking our eighth consecutive quarter with pro forma net income exceeding $1 billion, and the strongest cash flow from operations in the company's history,'' Chambers said in a statement. ''This momentum was achieved through sequential order growth across all major product categories and solid progress in our advanced technologies including security, wireless LAN and IP telephony.''

In March 2001, Cisco laid off approximately 5,000 full-time workers -- about 11% of its full-time work force -- and about 3,000 of the company's temporary and contract workers. It was the first big layoff of the dot-com bust, and Cisco took the brunt of the bad publicity associated with the downturn.

The computer-networking giant added more than 200 employees during its most recent quarter, in what was the first increase in its workforce in three years. As of May 1, Cisco's workforce totaled about 34,307, said officials.

Cisco spokesperson Robyn Jenkins-Blum said the new hires will primarily work in the U.S.

Cisco is set to launch a next-generation, high-end router later this month. The company has remained tight-lipped on product details, but industry watchers expect the company to unveil a so-called HFR router. The ''huge fast router'' is a breed designed to provide telephone companies with a cost-efficient, high-capacity router that can be upgraded easily, analysts said.

Market researchers at Dell'Oro Group have pegged high-end routers as the fastest-growing segment of the market. That segment reached $734 million last year, and Dell'Oro analysts expect it to grow another 31% this year.

Cisco's competitors have been giving the firm a run for its money in this market. The company's share shrank last year to 62% from 67% in 2002. At the same time, Sunnyvale, Calif.-based Juniper Networks saw its share grow 5 points to 31%, according to Dell'Oro.