Cisco to cut 4,000 jobs (Update)

Aug 14, 2013
The Cisco logo is seen on a telephone in Washington on July 18, 2011. The information technology giant announced Wednesday that it will cut 4,000 jobs, equal to five percent of its workforce.

Information technology giant Cisco announced Wednesday that it will cut 4,000 jobs, equal to five percent of its workforce.

Cisco executives said the cuts were necessitated by a weaker-than-expected economic recovery, with conditions especially disappointing in emerging markets.

The "economic recovery is slower and more inconsistent," chief executive John Chambers told analysts.

While the US market has been getting better, that improvement is offset by "softening" in emerging markets, Chambers added.

Chambers emphasized the company's need to "move fast" as it rebalances staff to meet growth areas. He said some of the downsized workers will undoubtedly be rehired in other posts.

"I have learned in this industry you lead with your mind, not with your heart," Chambers said.

The cuts announced Wednesday came despite an 18.2 percent rise in earnings, and pushed Cisco shares 9.1 percent lower to $23.97 in after-hours trade.

Wednesday's job cuts mark the third consecutive summer the company has downsized.

In July 2012, Cisco eliminated 1,300 jobs, citing global economic uncertainty. In July 2011, it eliminated 6,500 posts as part of a major company restructuring.

Cisco reported fiscal fourth quarter earnings of $2.3 billion on revenues of $12.4 billion, up from the year-ago level of $1.9 billion on revenues of $11.7 billion.

Per-share earnings exceeded analyst expectations by one cent at 52 cents per share.

Cisco officials signaled that first-quarter revenue growth will be in the 3-5 percent range, with earnings per share expected at 50-51 cents. The updated outlook was in line with analyst expectations, but a bit on the low end.

Cisco has been expanding its profile in some targeted growth areas such as cloud computing and Internet security with a run of recent acquisitions.

Explore further: Nokia turnaround since handset unit sale continues

add to favorites email to friend print save as pdf

Related Stories

Cisco beats estimates with 2Q earnings, sales (Update)

Feb 08, 2012

(AP) -- Cisco, the world's largest maker of computer networking equipment, on Wednesday said that its net income jumped 44 percent in the latest quarter as it continues to put last year's slump behind it.

Cisco's latest results show signs of turnaround

Nov 09, 2011

(AP) -- Cisco Systems Inc., the world's largest maker of computer networking gear, is showing signs of pulling a turnaround, exceeding analyst sales expectations for the second quarter in a row.

Cisco 1Q income up as US businesses buying again (Update)

Nov 13, 2012

Cisco Systems Inc., the world's largest maker of computer networking gear, said Tuesday that U.S. companies are starting to spend again, helping Cisco find more solid footing after some shaky months early this year.

Recommended for you

Nokia turnaround since handset unit sale continues

5 hours ago

Nokia appears to have turned around its fortunes after the sale of its ailing cellphone unit to Microsoft, reporting a third-quarter net profit of 747 million euros ($950 million), from a loss of 91 million euros a year earlier. ...

Yahoo CEO defends strategy in face of criticism

5 hours ago

Signaling her reign has reached a pivotal juncture, Yahoo CEO Marissa Mayer is trying to convince restless shareholders that the long-struggling Internet company is heading in the right direction.

Sk Hynix logs all-time high Q3 earnings

5 hours ago

SK Hynix, the world's second-largest memory chip maker, reported Thursday a record high quarterly net profit for the three months to September on strong sales and currency earnings.

User comments : 0