Coquettish Rebirth

The shock of the world economic downturn brought about by the stock market crash in 2000 is becoming more and more obvious now.

Just as Jia Hongjian watched LG fight Thomson in the European market, Cisco in the United States couldn't hold on.In the second quarter and before the mid-year financial report was announced, Cisco couldn't wait to announce another thing-they will lay off 8500 employees in the next six months!These 8500 people accounted for 5% of Cisco's 17 employees worldwide!17% of the employees were fired at one time to save money. It can definitely be seen that Cisco is about to cut off its wrists!Nearly one-fifth of the employees were fired at one time!

When Cisco's CEO Chambers came out to announce the news, he was really ashamed.He first announced that the practice of protecting cash flow he announced in May has not effectively protected Cisco from danger. As a sign of the crisis, Cisco decided to lay off a large number of employees and implement strict savings in order to meet the challenges and difficulties.The previously announced plan to lay off 5-3000 employees had to be implemented, and the scale needed to be expanded!At the same time, Chambers said that in order to punish himself, as long as Cisco does not turn a profit in the future, he himself will only get one dollar a year in the process of serving as Cisco CEO, and give up the benefits of hundreds of millions of dollars a year. Get the understanding of the fired employees - because a large number of these employees are Americans!

That's right, Cisco is going to fire 8500 employees, but it doesn't mean that all countries with branches in the world will share equally.This is based on market conditions.The North American market in the United States and Canada has experienced the greatest decline, so a large number of personnel will be reduced in the two alone, while a small number of personnel will be reduced in Europe, and because China is an emerging market that is growing, so there is no need at all. Will not reduce people!After the announcement of such a layoff plan, Cisco's stock price was hit hard that day!On the Nasdaq, Cisco's stock price plummeted $2.19 that day, and the stock price fell to $20.63, a drop of almost 10% in one day!In March 2000, Cisco's stock price was still as high as $3!After more than a year now, Cisco's stock is only a quarter of what it was a year ago!

In this poorly managed situation.Cisco also announced other modes of reducing expenses besides laying off employees - just like Huaxia Hi-Tech's previous acquisition of Philips' cdma department, it first started with travel expenses.The five-star hotel treatment and business class during business trips have been changed. At the same time, the benefits for employees have also been revised. It has also been changed from the most advanced medical insurance to only the most basic medical insurance...

This time Cisco is smart about their calculations, and they no longer announce their future plans.They didn't even say how much benefit the company would benefit from such layoffs and reduced pay.Not even talking about plans for the next quarter.It doesn't say whether it is expected to make a profit in the next quarter, or whether it will improve, anyway, I don't say anything.The financial commentators are also speculating about this.Some so-called critics said that such reticence is a sign of a rainy day, and that Cisco is not in real trouble now. After the layoffs, they still have about 12 employees around the world, and they are still a giant.Some people analyze that Cisco may make a profit of about [-] cents per share in the third quarter.

Next, the U.S. Department of Labor issued an announcement saying that the overall unemployment rate in the U.S. remained at 5% in May, while non-agricultural employment rose by 4.2 in May. It can be considered that the overall U.S. economic situation is not If things get worse, there are still people who are unemployed on the market who can continue to find jobs, which proves that the overall economic situation is okay.However, such a report from the Ministry of Labor directly hinders the possibility of the Federal Reserve cutting interest rates generously. After all, according to such a report from the Ministry of Labor, the Federal Reserve judges that the domestic economic situation is not bad, so there is no need for a large interest rate cut to stimulate the economy!And the Fed does not cut interest rates, relatively speaking, the stock market will not stop falling!So in theory, the U.S. stock market this year is still dominated by declines!

Under such circumstances, everyone's hope that the US stock market could recover in the second half of the year has basically been shattered.It can be said that such a large layoff of Cisco will have a strong impact on the entire Silicon Valley. At the same time, everyone has predicted that if the decline in the high-end manufacturing industry in the United States continues until the second half of the year, it may cause an impact on Europe and Asia. Make the crisis spread to other markets, and then cause the global economy to enter a period of stagflation!

It is not just Internet-related companies that are unlucky for the United States at this time.Enron, a No. 500 in the top 7 that has been standing firm for several months amidst all kinds of doubts, suddenly announced in June that the CEO resigned!This CEO named Jeff Sgreen has only been on the stage for 6 months!Why suddenly the boss of a company resigned after just taking office for 8 months?Before joining the alliance, more and more people were suspicious of An Ran, and suddenly the entire market became suspicious of An Ran. Everyone felt that there was something tricky about it!

At this time, Kenneth Ray, the current chairman who was the CEO before Sgreen, came out in a hurry to take over as CEO, and then held a press conference to tell all walks of life that Sgreen's resignation was only because of Sgreen's personal problems, but in order to protect Personal **, I can't say in detail what the personal reasons are.At the same time, Kenneth Ray patted his chest and told the reporters present that he can guarantee that Enron has no accounting problems, no energy transaction problems, and no shortage of funds!At the same time, he also expresses his understanding of some analysts in the market who are skeptical about Enron. He personally feels that Enron is not transparent enough in disclosing financial information and is unwilling to say more, which makes the public suspicious because they don’t understand it. Therefore, he guarantees that Enron will be suspicious in the future. It will increase transparency in financial information disclosure and be more willing to discuss with all parties in the industry.

With such an "open and honest" attitude, it won the applause of most people in the market—sometimes most of them are easy to be fooled. After An Ran patted her chest and said that she was fine. The analysts of various sell-side companies on Wall Street are constantly calling to sell Enron's stock. They also learn from Enron's boss and pat their chests with their own personality to guarantee that Enron is definitely the best investment project during this stock market crash. , and bragged about the earnings, saying that at least it can outperform the market and inflation.In this way, the "liars" on Wall Street really fooled batch after batch of middle-class people to buy Enron stock with their own money.But what they didn't know was that when Enron's mid-year report and second-quarter financial report came out at the end of July and early August, what was waiting for everyone was the news that Enron had started to lose money!

On the other hand, the influence of the stock market crash caused by the collapse of Internet stocks continues. Corning, which later made iPhone screen glass for Apple, also has a major business in the manufacture of optical fibers.The optical fiber market has gradually been affected by the collapse of the telecommunications market after the collapse of the network market.At the end of June, Corning suddenly issued an early warning announcement - since the current optical fiber business is mainly affected by the reduction in investment by telecom operators, their optical fiber performance in the second quarter must have a sharp decline compared to the first quarter. It is expected that Sales in the second quarter will decrease by more than 6% compared to the first quarter!Corning may enter a loss-making period. After the statistics of the second quarter in June are completed, Corning will start planning layoffs while announcing its financial report!

After Corning gave such an early warning, the market panicked.Because in the past, Corning has been doing well!Originally, Corning made glass, but optical fiber is actually glass.Although companies like AT&T have greatly reduced the investment in fiber optic lines, there is still a company called Global Crossing in this world that is looking for business everywhere and expanding!Global Crossing was originally a company established in the Bermuda region of the United States. Its main business was the laying of various submarine optical cables from the United States to Europe across the Atlantic Ocean. Therefore, it can be said that they are Corning's major customers and major financiers.Although Corning's overall performance had declined, in May, the U.S. Department of Defense announced that it would cooperate with Global Crossing to establish several optical fiber networks for military data transmission.Originally, after such a contract is signed, Global Crossing will definitely place a large order to ask Corning to make optical fibers, so it will definitely improve Corning's performance.But who knows that American companies such as AT&T will protest, saying that Global Crossing is simply a second-hand businessman, and there is no qualified technology at all!This prompted the U.S. Department of Defense to suspend contract negotiations and find a team of experts to investigate.

As a result, after investigating for about a month, at the end of June, after announcing the suspension of cooperation with Global Crossing, the stock price of Global Crossing suddenly fell sharply, and then Corning's second quarter hope was gone!Sales are sure to drop!But Jia Hongjian couldn't control so much, he was actually very happy to see these world giants get unlucky - if they weren't unlucky, how could he have a chance to buy the bottom?Although he has no money now, he will spend some money later. Next year or sometime, when these giants such as Corning and the like are in deep trouble, let’s use them to establish a joint venture or something. Properly successful?At that time, the amount of investment can be relatively small, and when the telecommunications industry starts to recover in a few years, it will not only provide related products to Jia Hongjian and the others, but also provide a lot of profits! (To be continued..)