Cisco's John Chambers talks layoffs, market turmoil at CEO Summit

Jacob Kepler

John Chambers, chief executive officer of Cisco Systems Inc., said that layoffs were a tough but necessary step as the company tries to adjust to a changing market.

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Jon Xavier: Web Producer- Silicon Valley Business Journal; Email | Twitter | Google+

The decision to layoff 4,000 workers was "one of the hardest I've ever made," Cisco CEO John Chambers told a crowd at the 2013 North Carolina CEO Summit. At the same time he said the decision was necessary and wasn't a choice he shied away from.
Laying off roughly five percent of its workforce was necessary because the technology market is in transition and Cisco needs to change with it, Chambers said.
"[W]e have to transition in this inconsistent market," he said. "If I did it the old world way, our company would miss these opportunities and we would become the road kill."
Chambers said that he expects one in three tech companies "won't exist in a meaningful way" in just a few years because of the change, caused by shifts in usage patterns by mobile and accelerated by the adoption of technologies like virtualization and software defined networking.
Cisco wants to be the one left standing, which is why it's trying to shift its workforce, and why it will continue to do acquisitions like the recent $2.7 billion deal for Sourcefire even as it makes layoffs, Chambers said.
"We don't compete against competitors," Chambers said. "We compete against market transitions."
To read more about the event, and what Chambers thinks about the importance of education in addressing U.S.'s workforce shortcomings, check out the story by Lauren K. Ohnesorge in our sister paper, the Triangle Business Journal.