Cisco to cut 6,000 jobs amidst lacklustre quarterly results
14 Aug 2014
Cisco Systems Inc projected lacklustre current-quarter results and said it planned to cut another 6,000 jobs, as the network equipment maker re-jigged operations to launch a range of high-end switches and routers.
The latest round of layoffs comes as the third workforce cut in about that many years for a company that was once integral to the internet boom.
Reuters quoted John Chambers as telling analysts on a conference call that the market did not wait for anyone and the company was going to lead it. He added, the ability to do that required some tough decisions. He added, the company would manage its costs aggressively and drive efficiencies.
He partly blamed the cuts for the uncertainty in global demand. In emerging markets, where the company faced sluggish sales and increased competition, the company faced continued challenges. China product orders were down 23 per cent, while Brazil saw 13 per cent declines.
Chambers said, as the company looked out, it did not see emerging markets growth returning for several quarters and believed it could get worse.
Total product orders increased 1 per cent, with 2 per cent growth in the Americas and Europe, the Middle East and Africa, offset by a 7 per cent fall in Asia and Pacific.
Cisco Systems might be doing somewhat better than what Wall Street had expected, considering its technology and sales challenges, however, that did not mean, that company would avoid layoffs in the coming months.
The company which was once the dominant player in hardware that moved the world's digital information around and between computer centres, Cisco faces challenges from younger companies, The New York Times said.
While Cisco's position at the top remained secure, it was getting harder for the company to command the profit margins it once did. According to Cisco, fourth-quarter revenues, stood at $12.36 billion, down from $12.42 billion in the same quarter a year ago. Net income came in at $2.25 billion, or 43 cents a share, slipping from $2.27 billion a year ago.
Using non-standard accounting common to many tech companies, Cisco announced fourth-quarter net income of $2.8 billion, or 55 cents a share.
The results from the quarter were slightly higher than the $12.14 billion in revenue, and per-share earnings of 53 cents, projected by a survey of analysts by Thomson Reuters.
