Cisco is shifting a slice of its workers’ pay out of bonuses and into their base salary, in response to concerns about soaring inflation.
The biggest maker of computer networking equipment will rejigger
“We asked them what compensation levers they appreciate more,” Katsoudas said in an interview. “With inflation going on around the world, they want cash in hand. So we’re shifting a few of our programs to really drive more of that cash to employees.”
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Cisco’s move comes as inflation continues to take a big bite out of household budgets. U.S. consumer prices rose in March by the most since late 1981, and Americans are paying much more for gas, food and rent.
The networking giant also expects to need between 20% and 30% less office space, Katsoudas said, as it consolidates its holdings and builds new offices that feature a blend of open space, small “huddle” rooms and places to socialize. The 59,000-square-foot New York office at 1 Penn Plaza next to Madison Square Garden, which reopened earlier this month, has only 50 desks, down from the original plan to include 150, leaving much more space for groups to gather for teamwork, training or socializing. One conference room includes bar stools, while others have small booths right outside for post-meeting conversations. The company is even looking to hire a “collaboration concierge,” a sort of cruise director for the office who will organize events and activities, while also helping staff navigate their new environs.
“I have to create a buzz here,” said Mark Miller, a Cisco business development director who spearheaded the office’s redesign, which began in October 2019 but was delayed by the pandemic. “We don’t want to commute just to compute.”
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So far at least, most Cisco employees are forgoing the commute entirely. Just under 20% have returned to its offices at least three days a week since reopening its U.S. locations March 1, which is lower than Katsoudas expected. Early enthusiasm for returning to the office has waned since last year, according to a January
“We are still ramping up,” she said. “Work is not a place you go, it’s a thing you do. I want people to feel they have choice.”
Like other companies, Cisco hopes to entice workers back into offices with relocations and refurbishments that make the office more of a destination than daily drudgery. Last year it moved its Midwest regional office from suburban Rosemont to downtown Chicago, leasing space in the city’s landmark Old Post Office building. The company is also opening a new Paris office, Katsoudas said, and plans to consolidate its scattered buildings in the tech hub of Austin. The shift has prompted the closure of regional offices, like those in Connecticut and New Jersey.
“In many cases, we were in the right cities but the wrong neighborhoods,” Katsoudas said. “Right now people want to be in cities, they want to be downtown, where they can walk around and grab dinner afterwards. It’s not just about the square footage, but the experience we want for our people.”
--With assistance from Ryan Cavataro.