Cisco’s 6,500 Job Cuts Could Hurt Push for Offshore Tax Holiday

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http://www.bloomberg.com/news/2011-07-21/cisco-s-6-500-job-cuts-could-hurt-push-for-offshore-tax-holiday.html

Cisco Systems Inc. (CSCO)’s plan to eliminate about 6,500 jobs worldwide is complicating the corporate lobbying campaign for a tax holiday that would allow multinational companies to return $1 trillion in offshore profits to the U.S. at a low tax rate.

The San Jose, California-based company, the world’s largest networking-equipment maker, has been among the most vocal supporters of a repatriation holiday being considered in the U.S. Congress. Cisco chief executive John Chambers has said he wants to return as much as $30 billion in overseas profits to the U.S. The company could increase its headcount by 10 percent, depending on details of a repatriation bill, he said before the job-elimination announcement.

The cuts at Cisco were announced July 18 as the push for a repatriation holiday gained support on Capitol Hill. Democrats including Senator Charles Schumer of New York signaled their backing in recent weeks for repatriation measures that would include job-creation requirements.

Other Democrats said Cisco’s job-cut announcement confirms their worries about a repatriation holiday’s potential effect on U.S. corporate employment levels.