My friend works at Cisco and told me about this last week. They are indeed taking the days out of their employees' vacation days. If they don't have any vacation days, they will be on unpaid leave for the week.

This type of thing has also happened to other friends of mine. It's a cost-saving maneuver and also helps lower the companies' liabilities due to having so many vacation days on the books (since the company has to pay you money for each vacation day you have once you leave).