Which belt lift?  Cisco CEO plans  billion budget increase to keep employees – The Information

Which belt lift? Cisco CEO plans $1 billion budget increase to keep employees – The Information

Cisco Systems CEO Chuck Robbins told executives earlier this month that the networking hardware pioneer will increase its operating expenses by $1 billion over the next 12 months, in part to boost employee salaries to accommodate a surge in departures contain, said one person with direct knowledge of the situation. Robbins made the surprising comment after the company’s revenue growth flattened in the quarter ended July and after a 12-month period in which Cisco trimmed operating expenses as its free cash flow declined. The company did not discuss Robbins’ plan in its earnings report or on Wednesday’s conference call.

Cisco’s move might seem unusual given the belt-tightening trend almost everywhere in the technology sector. Most big tech companies, including Google, Meta Platforms and Oracle, are freezing hiring, laying off employees or cutting contractors and irrelevant projects as their growth slows. At the same time, these companies are facing intense pressure to retain employees in a tight labor market after some workers raised concerns about their wages amid rising inflation. Earlier in the year, before macroeconomic conditions deteriorated further, managers’ concerns about employee turnover prompted Microsoft and Amazon to announce sweeping pay increases.