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
24/7/365 Network Uptime
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
August 15, 2013 2:02PM

    Bookmark and Share
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:



APC has an established a reputation for solid products that virtually pay for themselves upon installation. Who has time to spend worrying about system downtime? APC makes it easy for you to focus on business growth instead of business downtime with reliable data center systems and IT solutions. Learn more here.


 Hardware
1.   AMD Debuts 64-Bit ARM Server Chips
2.   MacBook Pros Get Update, Price Cut
3.   Watson's First Consumer-Facing Gig
4.   China To Call Qualcomm a Monopoly
5.   Design Central to Microsoft Future


advertisement
AMD Debuts 64-Bit ARM Server Chips
New Opterons target data center needs.
Average Rating:
Design Central to Microsoft Future
New ethos a break from functional past.
Average Rating:
Most Networks Not Ready for IoT
But most enterprises are prepared.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Tor Internet Privacy Service Warns Users It Was Breached
You may never have heard of the Tor Project, but the Internet privacy service is making headlines. Tor’s devs say users might be victims of an attack launched against the project earlier this year.
 
Canadian Government Charges China With Cyberattack
The government of Canada is not happy with China. Canadian officials have accused "a highly sophisticated Chinese state-sponsored actor" of launching a cyberattack on its National Research Council.
 
Researchers Working To Fix Tor Security Exploit
Developers for the Tor privacy browser are scrambling to fix a bug revealed Monday that researchers say could allow hackers, or government surveillance agencies, to track users online.
 

Enterprise Hardware Spotlight
AMD's ARM-Based Opteron Out in $3K Dev Kit
It's dubbed "Seattle" and it's AMD's first 64-bit ARM-based Opteron processor. The low-power chip is being released as part of AMD’s Opteron A1100-series developer kit, and aimed at high-end data center needs.
 
Apple Updates MacBook Pros, Cuts Prices Up to $100
The popular MacBook Pro laptop line just got an update and a price cut of as much as $100. The MacBook Pro with Retina display now includes faster processors and double the memory.
 
Dell, BlackBerry Not Sweating Apple-IBM Alliance
IBM's recent move to partner with Apple to sell iPhones and iPads loaded with corporate applications has excited investors in both companies, but two rivals say they are unperturbed for now.
 

Mobile Technology Spotlight
Virgin Mobile Offers Custom Smartphone Plans
As the wireless carrier wars continue heating up, Virgin Mobile just threw the customization coal onto the fire. The firm has debuted a no-annual-contract plan with rates based on individual use.
 
Collaboration Provider Asana Revamps Mobile App
Asana, a collaboration software provider started by a Facebook founder, is now out with a rebuilt native iOS mobile app. It replaces one that even the company admits was not up to par.
 
Facebook: You Will Use Messenger, and You Will Like It
Starting this week, Facebook users with Android and iOS phones will be forced to use the separate Messenger app to send Facebook messages. Pending messages will still be visible in the main app.
 

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.