Cisco has an estimated 5,000 staff in 14 towns and cities across the United Kingdom, but it is not known how many British employees will be affected by the cuts.
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The cuts stem from Cisco’s transition from its hardware roots into a software-centric organization.
The company ended July with a product backlog worth Dollars 4.6 billion, up 1 percent from a year earlier, and deferred revenue totaled USD 16.5 billion, up 8 percent.
Financial Times reported that The 27 analysts offering 12 month price targets for Cisco Systems, Inc. have a median target of 32.00, with a high estimate of 39.00 and a low estimate of 24.00. Cisco states that this plan is created to optimize its cost base in lower growth areas while further investing in key growth areas: security, IoT, collaboration, next generation data center, and cloud. Savings from the job cuts will be invested in newer businesses that Cisco expects to fuel sales growth.
Cisco indicated that layoffs would start from the first quarter of fiscal 2017.
A report from CRN earlier this week cited “multiple sources close to the company” saying that Cisco planned to slash up to 14,000 jobs or close to 20% of its global workforce. That contribution dropped to 45% for the recently ended year while promising segments such as security grew by double digits. Vanguard Group Inc. boosted its position in shares of Cisco Systems by 2.2% in the fourth quarter.
Cisco projected flat revenue in the first quarter and gave an earnings forecast that was shy of analysts’ estimates, saying it expected adjusted earnings of 58c-60c per share, versus Wall Street estimates of 60c. Analysts now estimate earnings of $0.60 per share.
Cisco’s shares were down 1.2 percent at $30.38 in after-market trading on Wednesday.
“We had another strong quarter, wrapping up a great year”, said CEO Chuck Robbins.
Out of 21 analysts covering Cisco Systems (NASDAQ:CSCO), 14 rate it a “Buy”, 1 “Sell”, while 6 “Hold”.
In the preceding year it had cut 4,000 jobs after having reduced its workforce by 1,300 in 2012 and 6,500 in 2011.
The Silicon Valley company announced the cuts – about 7% of its global workforce – during its fiscal fourth-quarter earnings report.
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That’s a big task given switching and routing still comprised almost half of Cisco’s revenue a year ago. “Cisco provides impacted role numbers as required by local laws and regulations”, said Robyn Blum, Cisco Communications.
