Cisco seeks savings in holiday shutdown

<p>SAN FRANCISCO -- Cisco Systems will close most of its U.S. and Canadian offices for four days over the holidays as part of a plan to cut $1 billion in costs in the current fiscal year, the company said Tuesday.</p><p>Cisco shares dropped 6 percent on fears that the move shows demand for computer networking equipment remains sluggish, forcing the company's first mandatory shutdown in more than a decade.</p><p>The San Jose company, which employs about 250 workers at its optical network engineering unit in Petaluma, is forecasting that sales will fall 5 percent to 10 percent in the current quarter as the credit crisis strangles spending by corporations.</p><p>Cisco wouldn't say how many employees will be affected by the closure or how much money it will save because of the decision.</p><p>Many Silicon Valley companies have traditionally shut down over the holidays when business is slow and employees are on vacation.</p><p>Some are now extending those closures, or revisiting a practice long since eliminated, in a bid to save money in a rocky economy.</p><p>Workers are usually either given paid days off or are asked to take unused vacation days.</p><p>Agilent Technologies, for example, will furlough employees for two weeks in December. Sonoma County's largest high-tech company, which employs about 1,400 workers in Santa Rosa, will close during the weeks of Dec. 22 and Dec. 29.</p><p>Its former parent company, Hewlett-Packard Co., also plans to close its offices for two weeks, instead of one. Apple Inc. and Adobe Systems Inc. are also asking employees to take time off.</p><p>Cisco's closure begins Dec. 29 and lasts through Jan. 2. The company describes it as a 4-day shutdown because it includes New Year's Day, a federal holiday when Cisco offices would be closed anyway.</p><p>Cisco said that "business-critical teams" including technical support and ordering services would stay open.</p><p>UBS analyst Nikos Theodosopoulos wrote in a note to clients that Cisco is likely aiming for bigger savings than the $1 billion outlined in the company's last earnings call.</p><p>Cisco shares closed at $15.42, down 98 cents.</p><p>Staff Writer Steve Hart and the Associated Press contributed to this story.</p>