Cisco Plans to Cut up to 5500 Jobs

Cisco, based in San Jose, California, is expected to announce the cuts within the next few weeks, the report said, citing sources close to the company.

Cutting Cisco's workforce of about 73,000 may give Robbins the resources to speed up the company's transition to a provider of software, hardware and services created to suit customers' needs as networking moves to cloud-based technology. During the same quarter a year ago, Cisco earned 59 cents a share on $12.8 billion in sales. Many early retirement plans have already been offered to employees, according to the website.

It seems that Cisco has so far declined to comment on the matter.

Cisco had about 73,100 employees as of April, according to data compiled by Bloomberg. Laying off one-fifth of its employees is not only staggering, it's also the largest cut to its workforce in the company's history.

Chief Executive Chuck Robbins, who took over from John Chambers in July previous year, has been steering the company toward more software and services businesses.


Wall Street analyst Trip Chowdhry of Global Equities Research predicted in a January report that Cisco would cut 14,000 employees in 2016.

The networking company has previously used the end of the fiscal year in the late summer to announce layoffs.

One of the report's sources said the cuts were specifically part of a shift meant to bring in staff skilled in the area of software-defined networking. Cisco execs have argued that they have to be aggressive in evolving their staff to keep pace with changes in networking.

JPMorgan Chase & Co. analyst Rod Hall says that Cisco has been preparing for tough times for a while as commoditization of its switches business sees lower profits over time.

The company's switching, collaboration, wireless, and security divisions all saw higher sales while revenue dropped in the NGN routing and data center products divisions. Visit MarketWatch.com for more information on this news.


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