Thread regarding Cisco Systems Inc. layoffs

Reducing SE base salary when they are shouldering the majority of customer relationships. I thought performance is to be rewarded. Definitely not by a base pay cut.
So called leadership presented the new SE structure and in the closing stated now we really have to have our sales goals number correct? Really so what have they been doing in the past? Guessing. I do not see the managers getting their base salaries reduced.

SEMs and SSEMs are getting the same cut. So don’t shoot the messengers.

your statement is incorrect. It is true that KSOs are being eliminated but that does not equate to a $10K loss. KSO money will be put into the commissions portion of comp so you will earn the same amount as you had in previous years (assuming 100% attainment)

Actually he/she IS correct. If corporate did what you describe, Bases would remain the same, and overall commission would increase (even if under plan) as the result of the KSO removal. The goal of the exercise is Opex reduction for the global sales org.

Little known, but factual statistic: Less than 60% of SEs make 100% of plan on average. So this move is financially positive for the company.

What are the new plan codes for FY20?

i.e.

FY19 CS134 -> ??

FY19 CS072 -> ??

FY19 CS130 -> ??

Perhaps s/he just saw through the corporate bllsht/brainwashing...

@Zk0k4wA-honh your statement is incorrect. It is true that KSOs are being eliminated but that does not equate to a $10K loss. KSO money will be put into the commissions portion of comp so you will earn the same amount as you had in previous years (assuming 100% attainment). If anything there is more upside as KSO's could not be overachieved as commissions can be. Also the commission rates have increased from 100-120% putting more money in SE's pockets. I'm afraid your manager did a poor job of explaining this to you...

The goal is work force reduction with no layoff costs.

I cant understand the logic behind this. What they really looking for? very weird, even more when Cisco is making money (stock value).... with the base salary you make plans and pay your bills... how they cant understand that. This is concerning.

I can confirm that these statements are accurate. I was told today that I would take a 3% base hit plus KSO will be gone. All in, I lost about 10K. The low level Mgr. tried to sugar coat it. Also, there were several SEs that that were protected by a false salary increase 2 weeks ago. So, overall they were not effected much. If you have not received a recent salary increase or promotion you are not considered a top performer.

What are the details from today’s call on this?

• KSO are eliminated

• Base cut 3%

• TTC at 100% stays the same

• The claim of increase upside in the form of accelerators for those that achieve more than 100%

Summary:

Bases will be cut.

If you don’t make 100% of quota, you’ll make slightly less under new plan.

If you make 100% of quota, you will make exactly the same TTC.

Over 100% of quota, you can potentially make a lot more.

However, the devil is in the details of a goal sheet and plan components. These were not discussed.

What are the details from today’s call on this?

It is now official.

Confirmed call on the morning of the 5th to discuss new SE plans, cuts, and attrition from it.

Confirmed - I have spoken to my SED this morning. He said we will see a “slight reduction” in base. There is a call on the 5th to walk managers through it.

Bases won’t be cut.

SE’s won’t all be retitled to SA’s.

The UK won’t ever leave the EU.

Trump won’t win.

The iPhone will never succeed.

Electric cars will never be a thing.

RBMK reactors don’t explode.

The Titanic will never sink.

These things we can all be sure of.

When in ciscos history have they ever reduced a base salary? No chance bases get reduced. Maybe reduced going forward with new hires but not existing employees bases. Doubt its even legal in half the states.

Confirmed. Bases will be reduced globally.

Did I see our CFO sold 70k rsu’s today - with 340k remaining and probably a lot more unvested. How to spend it - what a nice issue to have!

Base pay is absolutely not being cut. KSO's are being eliminated for all the SE Plans and that KSO % will be transferred to regular commission buckets. There will also be new sets of compensation plans introduced for certain specialties, but again this won't change base pay which will remain the same. It will only impact what specialists on SE plan are compensated on product wise.

The end state goal is of course a deduction in pay for the sales force as many SE's don't and cannot make plan let alone regularly.

When are we notified?

Here is the scam:

1) move all SEs to a common 75 / 25 plan. This means the base is the larger percentage of the 2 compensation components.

2) Cut base salaries. Literally cut the larger component 3%-5%

3) make everybody think it’s a non issue by telling them their TTC will remain the same.

4) wait 2 min, Hope everybody forgets point #3, and then tell everybody this will actually INCREASE TTC across the board.

5) hope nobody asks how a drop in base can create an achievable increase in TI, given the 2 are coupled, and the commission rates up to 100% have not increased.

6) downplay the fact that employee consent must be given in certain geographies, to make these cuts... I mean... “positive changes”.

7) don’t mention that if employee consent is not obtained (in relevant geographies), the employee will remain on their current plan for an extended period.

Here are some red flag phrases to watch out for:

“2:1 upside”

“Increased Target Incentive”

“Beyond the Excellence Point”

“More leverage”

“Supports Strategy”

“TTC increases” in the same paragraph as “TTC neutral”

“Supports our strategy”

This happened a few years ago in my org (architectures/CSE, not generalists/SE). KSO was removed and commission target was increased from 24% to 30%. Many saw this as losing money but I appreciated it. At 100% of plan, all is equal. Anything over 100% of plan and the multipliers were that much nicer. KSO is static money whereas a higher commission percentage provides more earning potential unless you regularly miss goal.

I laughed when they said that the focal increases people just received will be included in the calculation prior to the base reduction exercise. Meaning, in the end, all they are doing is raising your TI and subtracting from your base. Finance views the changes as “largely positive”, but they do admit that their will be “some disruption”.

Heard the same last night

This is correct. The details will be rolled out to SEMs June 4th and 5th. The company will need consent in some geographies either from the employee or the local work council to make this change. Finance and legal are already doing the leg worth to make this happen.

Reading between the lines, employees and councils generally don’t need to give consent for promotions and raises :) So draw your own conclusions.

The majority of the SEs will take a cut to their base pay. Finance will claim to be increasing the POTENTIAL upside in the SE comp plans to make it look like a “good thing”. When all is said and done, the base pay cut along with the elimination of KSOs will amount to a 5-10% total loss for SEs at plan.

Heard the same thing on the KSO's going away. What I didn't hear is what is going to replace them. They can't lower peoples base salary though.