What does it take to run the Best Company to Work For? Ask Chuck Robbins, CEO of Cisco Systems, and you will get a pretty standard answer: Communication is key.
“We communicate very honestly, openly, transparently, and authentically,” he says. “And we talk to our employees about any of the issues that they want to talk about. [That’s] really important today because employees want to work for human beings.”
That may sound like a common C-suite spiel, but when Cisco workers reviewed their employer, they too cited communication as one of the tech giant’s top traits. An internal platform called Team Space lets individuals and teams collaborate and ask questions of company leaders. An event series called Cisco Check-Ins attracted 59,000 unique employee views across 13 events during the company’s last fiscal year. During the check-in sessions, leaders share information about employee relations concerns, and workers give feedback on what’s working—and what’s not.
Those forums, along with Cisco’s sustainability efforts, mental health resources, internal hiring, and community outreach, landed the San Francisco–based tech giant that sells networking and telecom hardware at No. 1 on Fortune’s Best Companies to Work For list for the third straight year.
“Employees today care deeply about what the organization they work for stands for. They care about our purpose and what we believe in. And our purpose as a company is to power an inclusive future for all,” says Robbins.
Fortune’s list is based on employee surveys conducted in mid-2022. Since then, Cisco, like so many of its tech industry peers, initiated layoffs, reducing its headcount by approximately 5%, or around 4,800. Can a company that lays off workers still be considered a top employer? Robbins argues that even the best businesses have to make difficult decisions. They can still do good by their employees by making sure those tough choices are communicated clearly and carried out thoughtfully.
“Nobody likes it. I don’t like it. It’s the worst thing we ever have to do,” Robbins says of job cuts. The point of Cisco’s layoffs was to reallocate resources to areas of growth, and Robbins says the company tried its best to redeploy workers to “areas we wanted to invest in” before slashing positions. “Our employees really appreciated that,” he says. What do you say to the people that were laid off? “We were just honest about why we had to do it.”
Robbins, 57, became Cisco CEO in 2015, when the company was arguably best known for its Internet routers and switches, office phone networks, and WebEx video chat platform. Robbins has steered Cisco toward growing areas like cybersecurity and the Internet of Things.
In its most recent earnings for the three-month period ended Jan. 28, Cisco delivered better than expected results and raised its full-year outlook, buoyed by a robust public sector business and easing supply constraints. Quarterly revenue grew 7% year over year to $13.59 billion, though net income fell 7% to $2.77 billion.
Robbins attributes Cisco’s upbeat forecast of 9% to 10.5% revenue growth for this fiscal year, in part, to its ongoing efforts to shift its business to more of a recurring model.
“Now, 44% of our revenue is coming from recurring sources like software subscriptions,” he says.
Amid economic turmoil, Cisco customers are being more diligent about their tech investments but still “understand the strategic value,” Robbins says. “We see some customers who are requiring more signatures, but in general, the signatures come, it just takes a little more time.”
On a Monday in March, Robbins tours Cisco’s new 58,000-square-foot offices in Manhattan that opened in April 2022. The sleek, smart building is powered by Cisco technology, aims to minimize emissions, and features spaces where workers can collaborate. Robbins is especially proud of the office’s automated, energy-saving HVAC system. “If a room is empty for two hours, cooling goes off, and then 15 minutes before the next meeting, it’ll crank back up again. A lot of the integration is just really well thought-out,” he says.
Despite the lavish space, Cisco is not requiring employees to return to the office, with some exceptions. Some teams with engineers, for instance, are encouraged to come in three days a week.
“I used the phrase once: ‘Let’s make the office a magnet instead of a mandate,’ ” Robbins says. “We’re really trying to create spaces and environments that employees want to come spend time in and that they feel safe in; where they feel like they can collaborate with their peers; that feel modern.” Cisco is planning to refurbish some of its other offices and relocate several of its underutilized offices to areas where they’ll get more employee foot traffic.
Perhaps gathering more employees under one roof will foster the kind of communication that Robbins—and Cisco employees—seem to cherish. Robbins recognizes that the issues that come up in the workplace now may be different than what employees and management discussed before.
“We’ve always been honest, but the [range] of the topics that we’re willing to actually talk to our employees about has changed significantly. The number of things in the world that CEOs are expected to speak on has changed very dramatically,” he says.
Still, Robbins says he’s up for any subject matter directed his way. “I joke with our employees that I’ll answer any question you have, if it doesn’t put one of us in jail or put the company at risk. I think it’s just important to set the tone from the top on how we’re going to operate as an organization.”
Additional reporting by Megan Leonhardt.
This article appears in the April/May 2023 issue of Fortune with the headline, “Leading the ‘Best Company’ through the ‘worst thing.’”