Cisco to slash 6,000 more jobs as growth stagnates

SAN FRANCISCO — Cisco Systems will lay off up to another 6,000 workers globally, or 8 per cent of its workforce, as the world’s largest networking equipment maker works through a transition towards a new cycle of high-end switches and routers.

The latest round of lay-offs is at least the third workforce reduction in about as many years for a company once synonymous with the Internet boom, but which has lately struggled to sustain growth. Including the latest firings, it has removed 25,850 positions since February 2009, data compiled by Bloomberg showed.

A company spokesperson for its Singapore operations told Channel NewsAsia it is “too early to say what the impact will be in individual countries”, leaving the future for its employees here uncertain.

On Wednesday, Cisco released fourth-quarter earnings that illustrated its troubles as a tech industry giant competing in a rapidly-changing environment.

Long the dominant player in hardware that ships the world’s digital information around and between computer centres, Cisco faces challenges from younger companies that, while far from toppling the firm from its perch as one of tech’s bellwethers, have made it harder for it to command the profit margins it once did.

Its fourth-quarter revenues were US$12.36 billion (S$15.4 billion), down from US$12.42 billion in the same quarter a year ago, Cisco said. Net income was US$2.25 billion, down from US$2.27 billion a year ago.

For its fiscal year that ended July 26, Cisco’s revenue was US$47.14 billion, down 3 per cent. Net income was US$7.85 billion, down 21 per cent.

“The market doesn’t wait for anyone. We are going to lead it, period,” chief executive officer John Chambers told analysts on a conference call. “The ability to do that requires some tough decisions. We will manage our costs aggressively and drive efficiencies.”

Mr Chambers partly blamed the cuts on the uncertainty in global demand. In emerging markets, the company faces continued challenges with sluggish sales and increased competition. China product orders fell 23 per cent and Brazil had 13 per cent declines.

“Unfortunately, as we look out, we don’t see emerging markets growth returning for several quarters and believe it could get worse,” said Mr Chambers.

Total product orders rose 1 per cent, with 2 per cent growth in the Americas and the Europe, Middle East and Africa region, offset by a 7 per cent decline in Asia and the Pacific. Agencies