Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Hardware
DDoS Protection Powered By Verisign
Average Rating:
Rate this article:  
Cisco Records 18% Growth, Then Cuts 4,000 Amid Concerns

Cisco Records 18% Growth, Then Cuts 4,000 Amid Concerns
By Seth Fitzgerald

Share
Share on Facebook Share on Twitter Share on Linkedin Share on Google Plus

Getting rid of employees has been Cisco's response to many bad financial reports; this will be the third round of cuts in the past year. In March, 500 employees were laid off, and in July, 1,300 jobs were eliminated. To speed up innovation, CEO John Chambers and the other executives have decided to cut 5 percent of Cisco's total workforce this time.
 


Cisco reported impressive 18 percent growth in its latest financial statement but is nonetheless moving forward with massive job cuts. The company said Thursday it was cutting 4,000 jobs because sales growth had been too slow and it was concerned regarding how stable the future would be.

The 18 percent growth resulted from growing demand for networking devices now that mobile phones, computers, tablets and other devices are taking over many households. Sales of Cisco's routers, modems, and access points increased but are now beginning to slow.

Shares Plummet, Inconsistent Sales

News of the cuts brought a massive dip in Cisco's share value Thursday. Shares fell 9 percent after pre-market trading saw a slightly smaller sell-out. Revenue, profit and sales were all measurably higher than they were last year during the same period, but Cisco expressed concern about the future.

Sales were up in the United States by 5 percent, whereas Cisco was down in its Asian market.

"This recovery is more mixed and inconsistent than the others I have seen," CEO John Chambers told analysts. "The environment in terms of our business is improving slightly but nowhere near the pace that we want."

Instead of the massive improvements that Chambers and other executives were hoping to see, the 18 percent growth -- which many companies would love to see -- was not enough to ease Cisco's worries. Advances in cloud computing from other companies have left Cisco in an awkward spot. Newer cloud technologies allow businesses to store their data on private servers, which are more effective and cheaper than what Cisco offers.

The Cutting Solution

In order to speed up innovation and respond to what Cisco's customers want, Chambers and the other executives have decided to cut 5 percent of Cisco's total workforce. By becoming a slimmer company, they hope that it can turn around and produce faster growth since they are still in recovery mode.

Getting rid of employees has been Cisco's response to many bad financial reports; this will be the third round of cuts in the past year. In March, 500 employees were laid off, and in July, 1,300 jobs were eliminated.

Of course, profits will always rise when jobs are cut but Cisco can only continue down that road so long before it has no one left. Instead of getting rid of all of its workers, Cisco needs to find a way to navigate in the cloud market.

Chambers said he was still confident Cisco could be the No. 1 IT company in the world. The decision to cut was also influenced by global instability.

"The inconsistency of global GDP growth, and lots of time you see northern Europe start to get stronger, you see the issues in emerging markets start to get softer. You see us successful in one category, switching, and you see us not as successful except in the edge in terms of the routing."
 

Tell Us What You Think
Comment:

Name:



Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.


 Hardware
1.   New Lenovo PCs for Business Users
2.   Price Wars Hitting Laptop Market?
3.   Have Net Routers Reached The Limit?
4.   Obama Boosts Government Tech
5.   Surface Pro Ads Aim at MacBook Pro


advertisement
Acer Chromebook Packed with Power
13-inch screen on under-$300 devices.
Average Rating:
Can Surface Pro Tablet Replace a PC?
Microsoft says yes with 12-inch Pro 3.
Average Rating:
AMD Debuts 64-Bit ARM Server Chips
New Opterons target data center needs.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Cost of Target Data Breach: $148 Million
The now infamous Target data breach is still costing the company -- and its shareholders -- plenty. In fact, the retailing giant forecast the December 2013 incident cost shareholders $148 million.
 
Aruba Networks Handles Black Hat with Aplomb
It's not an easy job. Aruba Networks' task throughout the Black Hat USA conference in Las Vegas this month was to ensure thousands of attendees could connect without malicious attacks.
 
Chinese Hackers Nab Info on Millions of U.S. Patients
A group of Chinese hackers has stolen the personal information, including names and Social Security numbers, of about 4.5 million patients at hospitals operated by Community Health Systems.
 

Enterprise Hardware Spotlight
Three New Lenovo PCs Aimed at Business Users
Businesses everywhere want computing solutions that do more for less money, and Lenovo has unveiled three new desktop PCs that offer solid computing at a budget-minded price.
 
Aruba Networks Handles Black Hat with Aplomb
It's not an easy job. Aruba Networks' task throughout the Black Hat USA conference in Las Vegas this month was to ensure thousands of attendees could connect without malicious attacks.
 
Compression, Deduplication Come to Violin Concerto 2200
Violin Memory has announced that data deduplication and compression capabilities are now available on its Concerto 2200 solution. Typically, users will experience deduplication rates between 6:1 and 10:1.
 

Mobile Technology Spotlight
Apple Stock Soars Ahead of iPhone 6 Launch
The imminent release of the iPhone 6 -- and maybe even an iWatch -- has sent Apple's stock soaring to new heights. Considering what else the firm could have up its sleeve -- the stratosphere may be the limit.
 
HTC Debuts Windows Phone Version of One M8 Smartphone
HTC is bringing the Windows Phone mobile OS to its flagship One M8 device -- the first time any mainstream flagship smartphone has been offered with a choice of operating systems.
 
Verizon Earns Top Rating in Mobile Network Comparison
A new report says Verizon Wireless was the top-performing U.S. cellphone service provider in the first half of 2014, on a nationwide and state-by-state basis, as well as in metro areas.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.