Cisco is to cut 6,000 jobs after closing a year in which sales and profits declined.
The networking giant yesterday published fourth-quarter results which showed revenue and net profit both more or less flat on the corresponding period last year at $12.4bn (£7.4bn) and $2.8bn, respectively. For the full year, which closed on 26 July, sales were down three per cent to $47.1bn, while net income shrivelled 21.3 per cent to $7.9bn.
Cisco has commenced a "restructuring" that will affect about eight per cent its global workforce - equating to 6,000 employees. The exercise is forecast to result in pre-tax charges of $700m across the 2015 fiscal year, up to half of which will be realised in the year's opening quarter.
In an investor conference call, transcribed by Seeking Alpha, chief executive John Chambers claimed that the rejig would see resources redeployed to areas where they generate the best return. He added that the company expected another challenging year ahead, with no rebound expected in emerging markets for several quarters.
"It is an investment in our growth areas that we felt strongly we needed to do quickly," he said. "In terms of why now, it's the uncertainties in the market you're seeing a few headwinds and a lot of tailwinds. The pace to change is accelerating and we felt we had to move with tremendous speed on it. We are going to put in these investments into our growth areas such as cloud such as software such as security, and these are often skill sets that you have in one element of engineering that you have to move to another."
The cuts announced today take the total number of job losses at Cisco in the last three years to almost 23,000. In July 2011 the vendor revealed it was to shed 11,500 workers, followed by further headcount reductions of 1,300 in July 2012 and 4,000 in August last year.
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