Cisco to raise costs by $1B over next 12 months to stave off employees leaving: report
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Cisco (NASDAQ:CSCO) is set to increase costs by approximately $1B over the next 12 months in an effort to boost employee pay and keep them from leaving the networking giant, The Information reported.
The news outlet, citing a person with direct knowledge of the situation, noted that the comments came after Cisco (CSCO) reported fourth-quarter results earlier this week that topped expectations and said it anticipated sales to rise between 4% and 6% in fiscal 2023, ahead of expectations.
The website also added that Cisco (CSCO) Chief Executive Chuck Robbins told employees that they would only receive 84% of their target bonuses for the performance of the past year, compared to a 10-year average of 98%.
Cisco (CSCO) has seen a rise in employee dissatisfaction with pay, according to the report, with its human resources department saying in May that it would overhaul its compensation structure to give workers a higher base pay and lower bonuses.
San Jose, California-based Cisco (CSCO) has also seen a high level of turnover, at 9% in 2021, compared to 6% in prior years. Employees have left to join other tech companies such as Microsoft (MSFT) or Amazon (AMZN), the news outlet reported, citing two senior employees.
Cisco (CSCO) did not immediately respond to a request for comment from Seeking Alpha.
After Cisco (CSCO) delivered its quarterly results this week, several Wall Street analysts praised the company for its ability to navigate a difficult supply chain.