Cisco to Lay Off 4,000 Workers

CISCO Photo insideCisco plans to lay off 4,000 workers beginning this quarter, the networking giant announced Wednesday. The cuts amount to 5 percent of its workforce.

The layoffs come as Cisco anticipates a rocky economic environment and seeks to ensure its expenses remain in line with its revenues, said John Chambers, Cisco CEO, during the company’s fiscal fourth quarter earnings call.

“The economy is more mixed and unpredictable than I have ever seen it,” Chambers said.

He noted that a large portion of the layoffs will begin this quarter, with the remainder continuing through the rest of the fiscal year.

Maintaining profit levels, as well as a reallocation of resources to other areas such as security, mobility and the cloud, where the company believes there are greater growth prospects, were driving the decision for the layoffs, Chambers said.

Additionally, the company will have more agility with smaller teams, which, in turn, will help it with its first-mover advantage efforts, Chambers noted.

Chop Here, Prune There

Cisco’s 5 percent is its latest downsizing effort over the last 13 months. Last summer, the company said it would eliminate 1,300 positions, or 2 percent of its workforce, as part of an ongoing restructuring. And in March this year, Cisco axed 500 employees as part of an occasional rejiggering of resources, according to AllThingsD.

For Cisco, the cuts are not a result of the company bleeding tons of red ink. In fact, when it unveiled its fourth quarter results Wednesday, Chambers noted the company posted a record quarter for revenues and its bottom line was profitable.

Cisco posted fourth quarter revenue of $12.4 billion, up 6 percent from a year ago. And its net profit reached $2.27 billion for the quarter, an increase from $1.92 billion a year earlier.

However, Cisco’s forecast for the current quarter was less than what Wall Street had hoped for, and despite the cost-cutting moves it announced, investors punished the stock in after-hours trading.

Cisco’s shares fell 9.62 percent to $23.84 a share in after-hours trading, compared with its close during the regular trading session of $26.38 a share.

Comments

  1. BY Chrisd says:

    Of course this has nothing to do with “ObamaCare”!! Noooooooooooooo…. Any fool who voted for this toxic totally incompetent president deserves to lose their job.

    • BY bluemountain184 says:

      I think the real idiot is you not realizing that the Top 1%ers like Chambers practice layoff as a standard operating procedure to line up his pocket with year end bonuses.
      Bonuses that came from the wages of working people.
      If you don’t realize this, then you are just a typical dumb white conservative Republican voter.

  2. BY qwertyp says:

    this is by far the greediest thing i have ever heard. I am a huge cisco and have loved them up until today. Reading this entirely changed my faith in them within 15 minutes in all ways. Right now it is hard for a companies to fund there goals but this actually proves cisco has no idea what they are doing. The big next step for network companies is to standardize security of byod so normal network engineers actually see it as a good idea without any worries. Cisco has been trying to do this. But hearing about this layoff shows to me that they are not confident in them selves to really do it. cisco has a really really long way before they offer us really a solid byod system that is relatively as finished as there old products. ISE is far from being acceptable and same as many of there older/new products are really staying up with the market. they just spent a fortune on buying sourcefire and have gained new employees by merging with them but that product alone and the few new employees they have is not going to fix there huge problems with ISE that i expected to see over the next few years become perfected. Hearing this layoff proves that maybe for the first time cisco just cant deliver and is laying off to just save as much money as they can while they can and maybe come back once things recover. dumb idea really really dumb because even though its hard now if they dont invest all into there byod products in less then a year there ticket to stay as the leader will be gone. This is not the time to look at numbers but this is the time quantify demand and they have just failed at that. I have just lost faith in this company really being able to hold there crown. They may be able to rule when money is unlimited since that requires no real insite but they obviously are dumb on how to get out of a stretch when money is tight. Trying to save money like this is not showing your a strong company but it shows your leader is depressed and instead of trying to lead your company out of a small depression of funds it shows your too weak to over come it and your going face first into the black hole of depression and taking your company with it because obviously profit matters more then future goals to them. but let me tell you if you base that over demand and long term decisions your right now being penny wise and pound foolish. Cisco you may want to reconsider this decision otherwise you may kiss your crown goodbye because your missing the revolution of your field by not properly investing in everything when needed. sourcefire was not worth what you bought it for and to make up for your over priced buy and your over wealthy needs of profit your the basis of your company is being overlooked and is about to fall. But I guess when looking into history of who really is the leader of cisco considering there original product the first router was stolen and they just made profit off of it i guess explains there dumb greed dont know how its lasted this long. I just thought john chambers was better then the people who started this company aparently he is not anymore.

  3. BY qwertyp says:

    chrisd this doesnt have anything to do with obamacare. Cisco gives there employees really expensive high end healthcare from harvard pilgrim so what the hell are you talking about. obama care does not even effect cisco they always gave there employees good benefits. Please stop making up stuff. Our president has nothing to do with rich peoples greed and obama care does not effect a company paying people triple digits and giving them top of the line benefits. They have been doing this longer then obama has been in office. Trust me new obamacare rules dont effect them at all because they have been above thoughs standards already. So please stop blaiming stupid shit on obama that you dont even know about.

  4. BY Geo Meek says:

    To China the jobs go, China is going to do more then eat your lunch. Wake up Wake up…

  5. Pingback: Computer Sector Ranks No. 5 on Job Cuts - Dice News

Post a Comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>