Pink Slips with a Silver Lining

Cisco gets creative about layoffs -- and keeps ties to its labor pool

If layoffs can have happy endings, this may be one case: Cisco Systems (CSCO ), which dismissed 6,000 full-time workers in April, got creative about its severance package -- and decided to help charity. The San Jose (Calif.) company is allowing the pink-slipped who agree to work for a local nonprofit organization for a year to collect one-third of their salaries, plus benefits and stock options -- and be first in line for rehire once the economy recovers.

Nonprofits, of course, are delighted. "It's going to allow us to move ahead faster on technology projects," says Dave Sandretto, director of the food bank for Santa Clara and San Mateo counties. He's interviewing Cisco candidates for five accounting and computer-related positions.

OPTIONS EXTENSION.

  So far, 150 ex-Ciscoans are participating. The company is also offering workers nine months longer than usual to exercise their (currently underwater) stock options.

Carol Cone, who runs Boston-based strategic marketing firm Cone Inc., says Cisco is wisely maintaining ties to its talent pool while helping tech-challenged nonprofits: "It's really a fascinating and very visionary approach to a layoff." Hear that, Human Resources?

By Joan Oleck