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Cisco Layoffs Lead to Windfall for Charities - 2001-06-19

Cisco Systems, one of the largest U.S. producers of internet related programs, has seen its fortunes soar and then plunge, as many of its online customers have gone out of business. When Cisco found itself forced to lay off 6,000 full time workers, the company came up with a novel way of doing so.

The high tech world is filled with ups and downs. It was extremely likely that Cisco might be hiring again just months after laying all those workers off. So, Cisco spokesman Michael Yutrzenca says the company tried to come up with a program that would keep some of the laid off workers available to be re-hired.

And then, he says, there were other considerations. "We are really interested in how we can help non-profits in the community to increase their operational efficiencies, their communications and in the process of that, build more efficient businesses," he said.

The best way to help local charities become more efficient, Cisco decided, would be to lend them some high tech workers. So the company gave their laid off workers a choice: Go look for a new job or, go work for a local non-profit.

"We continue to keep these people as employees, but their job responsibility is at a non-profit organization," he said. "This particular program will pay them one third of their normal salary, but full benefits and stock options."

The plan enables Cisco to maintain ties to its talent pool while that talent pool helps technology-challenged charities. For workers who can afford the salary loss, it's a chance to hold onto company benefits and options and try working in a new area.

And for local charities, it's a windfall. Dave Sandretto, whose food bank distributes about half a million kilos of donated food to poor people annually at over 500 distribution sites, says he can certainly use the help.

"We have six different data bases that we are in the process of consolidating," he said. "So the use of Cisco employees will allow us to accomplish it a year or two years quicker than we would without the help."

As for Cisco Systems, Michael Yutrzenca says, being a good community citizen is good business. "It helps the business to assure that people in the community realize there's more to the employees than just going out there and making money for the corporation," he said.

So far, Mr. Yutrzenca says, over 100 employees have signed up.