Bewildered by what I was hearing this morning on CNBC, which covers bidness and financial happenings, I thought I must be missing something. Surely, I didn’t just hear John Chambers, Chairman of the Board and CEO of networking equipment giant Cisco Systems, say that despite his company’s robust profitability and despite his rosy outlook for the future, that he nevertheless finds it necessary to cut 5% of Cisco’s workforce, some 4,000 jobs?
Yes, I must be missing something. Or capitalism, as practiced by today’s multinational corporations, is an impenetrable mystery. It has been weird enough that throughout this slow-motion economic recovery corporate profits have been soaring, even as job growth has been relatively stagnant. Now it appears that profits don’t just lead to stagnant job growth, but to job cuts!
At least I wasn’t the only one who couldn’t understand John Chambers reasoning this morning. He was asked twice to explain why he was planning on eliminating jobs in the face of good news about his company. I confess that I did not understand either explanation and I suspect the panelists on CNBC didn’t either.
Here, watch below and see if you can figure it out and then explain to me the finer points of twenty-first century capitalism, in which a company can earn $2.27 billion (versus $1.92 billion last year), project long-term revenue growth of 5 to 7 percent, and still find it necessary to eliminate thousands of jobs. Please, I await some enlightenment:
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