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A whopping 75% of Cisco's new job creation was in locations outside the United States
Thu, 12/23/10 - 4:36am    View comments

CiscoCisco CEO John ChambersOn November 5, 2010 Cisco CEO John Chambers authored a blog titled:

U.S. Jobs, Innovation, Growth and Investment

Scandalously, Chambers blogged:

"We have been one of the few companies creating jobs during this difficult economic period, and in the last year alone we added over 3,000 jobs right here in the United States."

So why am I calling it a scandalous blog?

Well, according to Cisco's most recent Form 10-K filing (page 12) with the U.S. Securities and Exchange Commission, during Fiscal Year 2010, Cisco's United States employee headcount actually only grew by a mere +1,300 people (see the below 16-year Cisco employee headcount chart).

Heck, that's -1,700 less jobs than Cisco CEO John Chambers blogged he had created (which also means that 75% of Cisco's new job creation during its Fiscal Year 2010 were in locations outside the United States).

Furthermore, making it even more scandalous in my opinion, of the +1,300 new U.S. jobs that Cisco actually did create, it won't reveal how many were actually filled by U.S. Citizens.

16-year Cisco employee headcount chart:

Fiscal Year TOTAL* NonUSA MFG Engineers Sales Admin
2010 70,700 32,350 18,250 21,250 24,600 6,600
2009 65,550 28,500 16,600 19,300 23,250 6,400
2008 66,129 28,700 16,794 19,584 23,529 6,222
2007 61,535 26,500 16,227 18,410 21,465 5,433
2006 49,926 19,600 13,126 15,288 17,322 4,190
2005 38,413 11,000  6,812 13,935 14,414 3,252
2004 34,000  9,600  6,000 12,000 13,000 3,000
2003 34,000  9,000  6,000 12,000 13,000 3,000
2002 36,000 10,000  6,000 13,000 14,000 3,000
2001 38,000 11,000  7,000 13,000 15,000 3,000
2000 34,000  9,000  6,000 11,000 14,000 3,000
1999 21,000  4,400  3,900  7,000  8,600 1,500
1998 15,000  3,000  3,000  4,500  6,300 1,200
1997 11,000  2,000  2,200  3,400  4,500   900
1996  8,782  1,400  2,147  2,420  3,387   828
1995**  4,086    621    427  1,016  1,617   405

Source: Cisco Form 10-K Filings with the U.S. Securities and Exchange Commission.

*2010 thru 1996: MFG + Engineers + Sales + Admin = TOTAL

**1995: NonUSA + MFG + Engineers + Sales + Admin = TOTAL

Chambers continued:

"Our commitment to the U.S. economy and to the American worker is strong and we've made the investments to prove it. We believe that at least temporarily reducing the incremental tax rate on foreign earned profits would encourage companies to invest in the U.S."

Revealingly, it was Cisco's Fiscal Year 2005 Annual Report that specifically detailed its last "foreign earned profits tax holiday" where Cisco repatriated to the U.S. its accumulated income earned abroad:

"On October 22, 2004, the American Jobs Creation Act of 2004 (the 'Jobs Creation Act') was signed into law. The Jobs Creation Act creates a temporary incentive for U.S. corporations to repatriate accumulated income earned abroad by providing an 85 percent dividends received deduction for certain dividends from controlled foreign corporations.

"In the first quarter of fiscal 2006, we distributed cash from our foreign subsidiaries and will report an extraordinary dividend (as defined in the Jobs Creation Act) of $1.2 billion."

So how many new U.S. jobs did Cisco create in Fiscal Year 2006 with all that cash it received from its foreign subsidiaries, especially since according to Cisco CEO John Chambers, Cisco is committed to the U.S. economy and to the American worker?

Well, according to Cisco's Fiscal Year 2006 Form 10-K (page 10):

Again, a whopping 75% of Cisco's new job creations were in locations outside the United States!

Related stories:

Bloomberg: How Cisco can avoid the "U.S. repatriation tax" on its foreign earnings

What's your take?

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