Cisco plans to lay off 4,000 employees
Cisco Systems Inc. has stated that it is planning to lay off five percent of its employees, translating into 4,000 people losing their jobs.
Cisco made the decision to cut back its workforce after the company released disappointing revenue growth predictions in the Cisco Q4 FY’13 GAAP Income Statement Highlights, which stated that Gross Margin for Q4 FY’13 is predicted at 59.2 percent compared to 61.5 percent in Q3 FY’13, and that revenue growth will only be 4-5 percent.
The Chief Executive Officer of Cisco, John Chambers, revealed the information on a conference call.
He added: “The environment in terms of our business is improving slightly but nowhere near the pace that we want,”
The company is undergoing a radical change as it refocuses its growth areas and tries to reduce costs. Shares fell by more than 9 percent in a matter of hours – the biggest dip in over a year.
Cisco Fourth Quarter and Fiscal Year 2013 Earnings
- Q4 Revenue: $12.4 billion (increase of 6% year over year)
- Q4 Earnings per Share: $0.42 GAAP; $0.52 non-GAAP
- FY 2013 Revenue: $48.6 billion (increase of 6% year over year)
- FY 2013 Earnings per Share: $1.86 GAAP; $2.02 non-GAAP
Cisco Chairman and CEO John Chambers, said:
“My confidence in our ability to be the #1 IT Company is increasing. Our fourth quarter was a record on many fronts, with record revenue, and record non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share. In every case, we exceeded the midpoint of our guidance. We also generated $4 billion in operating cash flow in the quarter, another record.”
Frank Calderoni, executive vice president and chief financial officer of Cisco, said:
“Our financial strategy is working as our profits grew faster than revenue for the full fiscal year. Our fourth quarter also delivered solid financial results as we continued to deliver profitable growth to maximize shareholder value for the long-term.”