Cisco To Cut 4,000 Jobs Due To Slow Growth
SAN JOSE (CBS SF) — Cisco announced it would lay off some 4,000 workers beginning in the first quarter of 2014.
The number represents about five percent of the San Jose-based company’s workforce.
In a conference call, CEO John Chambers forecast revenue growth of three to five percent, lower than the five percent or more predicted by analysts.
“They’re very concerned about slowing growth overseas, especially in emerging markets,” said Bloomberg News editor Michael Regan, who noted that 42 percent of the San Jose-based company’s sales are outside North America.
Chambers did not indicate whether the majority of the job cuts would be in the United States or elsewhere.
Following the announcement, Cisco shares fell sharply, dropping nearly 10 percent in after-hours trading.
The news of layoffs came after the Silicon Valley giant released its earnings report showing an increase in profit and revenue in the latest quarter..
Cisco Systems Inc. earned $2.23 billion, or 42 cents per share, in the three months that ended on July 27. That’s up from $1.92 billion, or 36 cents per share, a year earlier.
Adjusted earnings were 52 cents per share in the latest quarter, squeaking past Wall Street’s expectations by a penny.
Revenue rose 6 percent to $12.42 billion from $11.69 billion.
FactSet says analysts expected revenue of $12.41 billion.
Cisco’s performance is widely regarded as a bellwether for the technology industry. That’s because the San Jose company cuts a broad swath, selling routers, switches, software and services to corporate customers and government agencies.
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