Uncommon Wisdom

Nov 26 2008   5:06PM GMT

Cisco’s four-day holiday: Signaling stability?

Tom Nolle Tom Nolle Profile: Tom Nolle

Cisco plans an unprecedented shutdown for four days during the holiday period, part of a plan to achieve over a billion dollars in cost savings to help counter the impact of the downturn in IT and networking spending.

We believe the step is a kiss blown at Wall Street, something Cisco knows is likely not to be the right answer but that may be necessary to support the stock price in the near term. Even in that light, we believe the move to be unwise because it tars Cisco with the brush of a firm experiencing problems in the downturn, something competitors might play on directly but that will indirectly challenge the most basic value proposition Cisco presents to buyers—stability.

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