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. – Wall Street analysts aren’t supposed to be cheerleaders, but Cisco executives certainly heard some boosts in a conference call to discuss the networking giant’s quarterly financials and an update on the massive layoffs it is making as well as a corporate-wide reorganization.

“First, congrats,” said Tal Liani, an analyst at Bank of America Merrill Lynch.

“Finally, we see some stabilization.”

The 2,100 people taking early retirement among a 6,500 total work force reduction – including 2,600 in the U.S. and Canada – and the 1,200 contractors who will be cut this quarter might disagree with that comment. They are being “stabilized” right out of work in the toughest economy since the Great Depression after Chairman and Chief Executive officer John Chambers led the company into ventures such as consumer video cameras that clearly backfired. (Read about the earnings call here.)

The “stabilization” also included a lot of people in the executive suites. Cisco executives noted in the call that they had reduced the ranks of vice presidents and above by 17 percent.

As is his habit, Chambers used the conference call to talk at length about Cisco’s global performance. He has no peer as a CEO cheerleader. And he chose to put the best face possible on a quarter than exceeded analysts’ expectations as well as the huge gutting of the company he ordered.

Here’s a segment of his pep talk, courtesy Seeking Alpha:

“We have always used these market conditions to make bold and tough decisions and then execute it in a way that further extended our lead versus our peers.

“Our clear goal is to do this once again. We have already made and implemented many of the decisions to achieve our next phase of growth in the next 3 to 5 years, and the creation of value for our shareholders.

“You will now see us move aggressively to pull away from more competitors as they adjust to these market challenges. Having already made these changes well ahead of our competition, this is also a competitive advantage for us. …

“We will achieve a better balance of our entrepreneurial and operational capabilities … In simple terms, you will find us to be a very focused, agile, lean and aggressive company this next year.

“We do not underestimate the transitions in front of us or the importance to rapidly simplify our organization to deal with the many challenges facing us, especially in switching public sector and now the global financial concerns.

“As we have shown by our tough and bold decisions last quarter, we are committed to a leadership team to make the required fundamental changes to our operating model. We clearly intend to use these market inflection points to position Cisco to lead.

“I have always believed that our strategy starts and stops with customers and our partners that serve them. As you would expect in the last quarter, I’ve talked to hundreds of customers and top partners in individual meetings. While I thought and hope that they would stay committed to Cisco during our transition, I found that, without exception, although I’m sure there are some out there, that not only are they remaining committed to Cisco, because of our unique value we bring them, but they also want and expect us to win. This is clearly what we are going to do now.

“To summarize this simply, our entire company is ready to accelerate. Our employees are ready for this change, and they know what an energized Cisco is capable of achieving. Throughout our history, Cisco has adopted and evolved to meet both challenges and opportunities. This time is no different in terms of results, although we will clearly do it in a different, more simplified and accountable way that we have done before.”

Interestingly, there has been media speculation that Chambers’ own position might be in jeopardy. Then came the debt crisis and the Wall Street collapse. Now, as The Street noted, this latest financial crisis may be a blessing for Chambers personally.

“I was never in the camp that called for John Chambers’ ouster, but I think the market situation provides partial (emphasis on ‘partial’) vindication,” Morgan Keegan analyst Simon Leopold told The Street.

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