Cisco Systems on Wednesday announced that it is planning to cut as many as 6,000 jobs over the next 12 months as part of a restructuring plan.
Cisco officials haven’t revealed as to which departments will be affected by the job cuts but said that several areas of the business will be going through restructuring.
The San Jose, California based company announced the job cut plans while reporting its fourth quarter earnings results. The company revealed that its fourth-quarter revenue decreased to $12.36 billion, as compared to $12.42 billion reported in the same quarter a year ago. Net income was $2.25 billion, or 43 cents a share, down from $2.27 billion a year ago. The fourth quarter results were however higher than results projected by Thomson Reuter’s analysts of $12.14 billion in revenue, and per-share earnings of 53 cents.
Announcing the job cut plans, Chief Executive Officer John Chambers said that the market doesn’t wait for anyone and to lead the dynamic market the company will need to take some tough decisions, manage costs aggressively and drive efficiencies.
He said that the company is looking out to reallocate resources in growth areas, such as cloud and security. Cost savings from the layoffs will be further invested in Cisco’s data center, software, cybersecurity, cloud services businesses and Internet of everything.
Chambers said that sluggish global demand and stiff competition from rivals can be blamed for the job cuts. He added that Cisco expects demand in international markets to be weak and sales in the first quarter of 2015 to be flat to up one percent with earnings projected to drop between 51 and 53 cents per share.
