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...
Neustar, Inc.
Protect your website & network
using real-time information & analysis

www.neustar.biz
Data Storage
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.


 Data Storage
1.   Amazon Intros Zocalo Storage Service
2.   EMC Moves Toward Hybrid Cloud
3.   Oracle Boosts ZS3 Storage Server Line
4.   Fusion-IO Deal Speeds SanDisk Shift
5.   Microsoft Fights Dublin Data Access


advertisement
Amazon Intros Zocalo Storage Service
Online storage and sharing for business.
Average Rating:
EMC Moves Toward Hybrid Cloud
Buys TwinStrata; debuts VMAX3 storage.
Average Rating:
Fusion-IO Deal Speeds SanDisk Shift
As flash storage grows in data centers.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Report: Chinese Hackers Hit U.S. Personnel Networks
Hackers from China broke into the computer networks of the U.S. Office of Personnel Management earlier this year with the intention of accessing the files of tens of thousands of federal employees.
 
Charges: Russian Stole Data from U.S. Restaurants, Zoo
A Russian man arrested on bank fraud and other charges hacked into computers at restaurants in Washington, hundreds of other retail businesses, and even the Phoenix Zoo, authorities say.
 
Another Month, Another IE-Focused Patch Tuesday
Microsoft rolled out 59 vulnerabilities for Internet Explorer in June. But the IE-patching party is not over yet. Redmond published six new security bulletins on Tuesday; two, critical; three, important.
 

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 | Small Business | 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 | XML/RSS Feed

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.