Tomahawk, WI 08/14/2014 (Basicsmedia) – Cisco Systems, Inc. (NASDAQ:CSCO) has announced that plans are underway to reduce its workforce by 6,000 as the network equipment maker tries to make a smooth transition towards high-end switches and routers according to CNBC’s Josh Lipton. The 6,000 job cuts represent 8% of the company’s workforce and expected to allow the company saves a great deal in terms of operation cost as it forges forward with its restructuring efforts.
“Out of the conference call right now Cisco’s Conference call; the CFO has taken over and is talking about restructuring actions at the company. He says it is going to affect 6,000 employees that are about 8% of the workforce.It means Cisco take a charge of up to $700 million,” said Mr. Lipton.
The latest layoffs mark a series of layoffs in the recent years that Cisco has been using to avert slow growth in the industry having cut 4000 jobs last year same period. The company’s CEO, John Chambers, has blamed the latest run of layoffs to the uncertainty of global demand especially in emerging markets where the company continues to face sluggish sales.
Cisco Systems, Inc. (NASDAQ:CSCO) has also provided a cautious guidance for Q1 with the CFO reporting that gross margins may come in at between 61 and 62 % with an EPS od between 51 and 53 cents against street estimate of 53 cents.
Cisco Systems, Inc. (NASDAQ:CSCO) reported better than expected results for the quarter with earnings per share of 55 cents on revenue of 12.536 billion against Street estimates of 53 cents a share on revenue of 12.1 billion.
“Cisco just reporting 55 cents on 12.536 billion the street was looking for 53 cents 12.1 billion, so that is a beat on the bottom and top. Just looking through the results; product revenue at 9.5 billion is better than expected, services revenue at 2.83 billion a bit better than expected,” said Mr. Lipton
Cisco Systems, Inc. (NASDAQ:CSCO)’s Chief Executive Officer has been looking for ways to transform the company into a kind of software and business consulting company a strategy borrowed from International Business Machines Corp. (NYSE:IBM). Cisco profit for the quarter came in flat compared to a year earlier, at $2.8 billion.