Cisco CEO Says He Will Try to Avoid Major Layoffs

Cisco Systems Inc. Chief Executive John Chambers said at a software conference in New Orleans that he hopes to avoid major layoffs as the No. 1 maker of computer-networking equipment copes with a sales slowdown and its stock hits a 22-month low.

“I will try to do everything humanly possible not to have any major layoffs,” Chambers said. “Will there be reallocation of people? Of course.” He wasn’t more specific. Cisco has said results will suffer as a U.S. economic slowdown prompts telecom companies and other Cisco customers to spend less. Earlier this month, the company said fiscal third-quarter sales may fall as much as 5% from the previous quarter.

Separately, Cisco won an order to sell as much as $1 billion of gear to Houston-based El Paso Corp., which is building a fiber-optic network. Shares of San Jose-based Cisco fell $2.19, or 7.7%, to close at $26.06 on Nasdaq. Shares of El Paso, which owns the biggest U.S. system of interstate natural gas pipelines, rose $1.47 to close at $72.46 on the New York Stock Exchange.