Note: The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.
RESEARCH TRIANGLE PARK, N.C. – John Chambers took center stage in Las Vegas on Tuesday not to gamble but to promise his company’s customers and stockholders that he is making changes which will right the struggling networking giant.
But Chambers’ words didn’t persuade Jim Cramer, the driving force at TheStreet and host of “Mad Money” on CNBC.
In a video interview at TheStreet.com, Cramer said Cisco needed to make “one layoff” – Chambers.
Reports circulated Monday and Tuesday that Cisco (Nasdaq: CSCO) could cut as much as 14 percent of its labor force – some 10,000 people. (Read more here.) Details of the layoffs are expected to be announced when Cisco announces its quarterly financials on Aug. 11. The company reportedly is paying as many as 3,000 people to take early retirement and cut hundreds of jobs associated with its failed Flip consumer videocamera venture.
Since Cisco employs more than 4,000 people at its campus in RTP – its second largest campus – talk about layoffs is big news.
Chambers put his best foot forward Tuesday at the Cisco customer event in the Las Vegas convention center. The San Jose Mercury News described Chambers as acting like a “gregarious talk-show host.”
“What you see, if we do our job right, and we will, is the ability to speed our decisions,” Chambers said, according to TheStreet.com. “Speed of decision [making] is the number one thing that I want to see at Cisco.”
The Mercury News noted that Chambers talked for an hour during which he “sauntered into the aisles” and greeted some people by name. “We were pretty top-heavy,” Chambers said, according to the newspaper. “Our speed of decision-making slowed down.”
Toward that end, the Wall Street Journal reported that Chambers said “We were too complex. You will see us leaner and more focused.”
The CEO insisted he remains optimistic.
“Where will we be, two to three years from now?” The Street.com reported him as asking. “We will be a company that will lead the future of networking.”
TheStreet.com noted that Chambers predicted “changes in engineering and sales.”
Chambers continues to double-down on video, TheStreet.com added.
“Four years ago, we said that video will be the new voice,” he explained. “Video four years from now will be the leading way we communicate, it will be the primary form of IT.”
Chambers is under pressure on multiple fronts, including shareholders frustrated by the company’s slumping stock price. Will he deliver on his promises?
Cramer isn’t buying the Chambers story, although he acknowledged in the video that he has “known John for years.”
The company was “a lot more Chambers hype than we realized,” he said. Cramer added that Chambers was “too optimistic.”
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