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General

Cisco plans more job cuts as quarterly sales flat

Thursday 14 August 2014 | 08:44 CET | News
Cisco reported revenue of USD 12.4 billion for its fiscal fourth quarter to July, down 0.5 percent from a year earlier. The gross margin rose to 59.9 percent from 59.2 percent a year ago, while the operating margin fell to 21.7 percent from 22.7. Net profit dropped 1.0 percent over the same period to USD 2.2 billion. 

Cisco said the operating environment remained "tough" but the company's book-to-bill ratio was "comfortably over 1" in the quarter. Order were up 2 percent in the Americas and EMEA region, while falling 7 percent in Asia. The enterprise sector was strongest, with 9 percent growth in orders, followed by an 8 percent increase in the commercial sector. Public sector orders were flat, and the service provider market contracted 11 percent. Growth was led by data centre and security products, as well as key switching and routing products, such as the Catalyst 3850, NCS 6000 and CRS-X. 

Cisco spent in total USD 13.3 billion in the past fiscal year on share repurchases and dividends and finished the year with total cash of USD 52.1 billion. While the company's headcount rose by around 1,000 last year to 74,000, Cisco announced another round of job cuts. It will eliminate around 6,000 positions at a restructuring cost of USD 700 million. 

Cisco CEO John Chambers told the Wall Street Journal that the job cuts are designed to make room for adding different kinds of skills, rather than lowering costs. He does not expect the total headcount to change over the current fiscal year, as staff are added in areas such as data centres, security and cloud offerings. Chambers declined to say which areas of he business would be affected by the lay-offs. 


Categories: General
Companies: Cisco
Countries: World
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