The shares fell 6 percent on fears that the move shows demand for Cisco's computer networking equipment remains sluggish, forcing the company's first mandatory shutdown in over a decade.
The San Jose, Calif.-based company is forecasting that sales will fall 5 percent to 10 percent in the current quarter as the credit crisis strangles spending by corporations.
Cisco wouldn't say how many employees will be affected by the closure or how much money it will save because of the decision.
Many Silicon Valley companies have traditionally shut down over the holidays when business is slow and employees are on vacation. Some are now extending those closures, or revisiting a practice long since eliminated, in a bid to save money in a rocky economy.
Cisco shares closed down 98 cents at $15.42.