Updated from 3:55 p.m. EST
will implement a mandatory year-end shutdown, the first such move in more than a decade, as part of its cost-savings plan.
The networking giant said Tuesday it will close its facilities in the U.S. and Canada from Dec. 29 to Jan. 2. Cisco said it will make exceptions for certain teams, including technical-assistance services and the channel-partner and product-ordering group.
The year-end freeze doesn't come as a complete surprise as
said on its fiscal second-quarter conference call that it plans to reduce its expenses by $1 billion and realign another $500 million of its resources.
"Cisco will be targeting reductions in travel and discretionary-related expenses, including offsites, outside services, equipment, events, trade shows, prototypes, marketing and other activities," company representative Terry Alberstein said in an email.
Cisco is feeling the pain of the current economic crisis, noting a significant slowdown in tech spending during the last weeks of the quarter. Cisco cited shrinking enterprise and service-provider budgets and an increasing uncertainty.
"In particular, this will help lower payroll and facility expenses," wrote Nikos Theodosopoulos, analyst with UBS, in a research note Tuesday. "We believe it is prudent for Cisco's management team to plan for cushion in the event of weaker than expected revenues."
Cisco shares were down 6% to $15.42. Among other networking companies,
rose 6.8%, and