Cisco slashes up to 5500 jobs
- by Emilio Sims
- in Money
- — Aug 21, 2016
"Today, we announced a restructuring enabling us to optimise our cost base in lower growth areas of our portfolio and further invest in key priority areas such as security, IoT, collaboration, next-generation data centre, and cloud".
According to reports, Cisco Systems is planning a mass jobs cull with 5,500 jobs in danger - or around seven percent of its global workforce.
Cisco's fourth-quarter net profit rose to United States dollars 2.81 billion, or 56 cents per share, from USD 2.32 billion, or 45 cents, a year earlier.
Cisco also posted earnings and revenue that topped analyst expectations on Wednesday. Earnings per share are also expected to increase just slightly from 59 cents with the high range of EPS for the first quarter at 60 cents.
Cisco's shares were down 1.2 percent at $30.38 in after-market trading on Wednesday. The company has made moves to diversify its revenue sources, such as the $1.4 billion acquisition of cloud-based internet of things service platform developer Jasper Technologies earlier in the year, but these hardware categories remain its biggest revenue streams.
Cisco's traditional business of switches and routers has been struggling with sluggish demand from telecom carriers and enterprise customers and intense competition from companies such as Huawei and Juniper Networks Inc.
Cisco had about 73,100 employees as of April. The strategy paid off: Security products and services saw a revenue gain of 16 percent in the last quarter of 2015. Microsoft Corp kicked off one of the largest layoffs in Tech history in July 2014 after it said it would slash 18,000 jobs.
"The shift to California is undeniable", said Eric Noble, president of the CarLab consulting firm.
The latest round of layoffs comes as the fourth workforce cut in about as many years for a company that was once integral to the internet boom.
The networking giant, while it generated $48.7 billion in revenue in 2016, is still getting left behind by its software-focused rivals. In addition, Mr. Robbins has been trying to switch the company's focus toward software and subscription business for quite some time. The company projected sales growth of as much as 3 percent in the period that ended in July, compared with analysts' projections for a revenue decline.
