Cisco sheds jobs in business realignment
Published: 27 Feb 2009 16:57 GMT
Cisco has laid off about 250 employees at its headquarters in San Jose this week, The Wall Street Journal reported on Thursday. Other jobs in offices in the US and around the world were also cut, the company said.
The cuts are part of Cisco's normal course of business as it focuses on growth areas, the company said.
"Cisco is constantly evaluating its business priorities, resources and overall employee alignment as part of our business-management process," the company said in a statement. "This limited restructuring is part of our ongoing, targeted realignment of resources and was previously discussed on our fiscal second-quarter 2009 earnings call."
Other large technology companies have also laid off workers amid the deepening worldwide recession. Microsoft has already announced 5,000 job cuts over the next 18 months, and SAP will cut about 3,000 people.
Chief executive John Chambers said during the company's quarterly conference call earlier this month that it would shed between 1,500 and 2,000 employees as it realigns the business. Cisco sells networking equipment such as routers to internet service providers and other large infrastructure companies.
Chambers insisted the company is not planning a major layoff, which he defined as cutting 10 percent or more of the company's workforce. Cisco currently employs about 67,000 people worldwide.
Cisco has been affected by the worldwide recession, and it has seen revenue slow as its corporate customers and large communications service providers slow their spending. In its second fiscal quarter, the company's revenue dipped by about 7.5 percent to $9.1bn (£6.4bn), compared with the previous year.
Chambers warned that worse was to come, saying he expected sales to dip as much as 20 percent in the next quarter.
The chief executive has also said that Cisco is well positioned to emerge even stronger after the economic malaise, and that the company has been investing in new markets, such as consumer electronics and video, for the past couple of years.
Instead of making major workforce reductions to control costs, Cisco will focus on reducing expenses by $1bn by the end of fiscal year 2009. To achieve this goal it has taken a 'pause' in hiring and reduced travel, offsite meetings, outside services, equipment, events, prototypes, marketing and other activities.
However, the company has considerable reserves. In January it had about $29.5bn in cash, and it just issued an additional $4bn debt to help fund acquisition.
Credit: Cisco sheds jobs as it 'realigns' business from CNET News
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