Cisco to cut up to 6,000 jobs starting this fall
Facing flat revenues and tough competition, network equipmentmaker Cisco says it will lay off up to 8 percent of its workforce. The restructuring will cost Cisco up to $700 million.
Cisco said Wednesday that it will lay off up to 6,000 workers, or 8 percent of its workforce, as part of a restructuring.
The company, which makes routers, switches and software, said the layoffs will affect workers in operations around the world. The announcement was made during a conference call discussing its fiscal fourth-quarter earnings.
The San Jose, California-based company on Wednesday reported a 1 percent decline in profit, to $2.25 billion, as revenue dipped to $12.36 billion from $12.42 billion. Its adjusted earnings for the three months ended July 26, its fiscal fourth quarter, came to 55 cents per share, which was two cents more than analysts expected, according to Zacks Investment Research.
During the conference call, Chief Financial Officer Frank Calderoni said the company estimates pretax charges of up to $700 million, with about $250 to $350 million recorded in the current quarter, for the restructuring.
Shares fell 25 cents, or 1 percent, to $24.95 in after-hours trading. The stock has risen 12 percent this year.
Here is an excerpt of the Cisco conference call where Mr. Calderoni announced the job cuts:
[W]e will be taking a restructuring action in FY15 that will be focused on continuing to invest in growth, innovation and talent while managing cost and driving efficiencies. These actions will impact up to 6,000 employees representing approximately 8% of our global workforce. We expect to take these actions starting in Q1 FY15 and currently estimate that we will recognize pre-tax charges to our GAAP financial results of up to $700 million. We expect that approximately $250 million to $350 million of these charges will be recognized during the first quarter of FY15 with the remaining amount recognized during the rest of the fiscal year.