Cisco To Lay Off 1,300 Employees
Cisco (NYSE: CSCO) plans to lay off about 1,300 more employees, about 2 percent of its workforce, as sluggish sales growth continues for one of the best-known and fastest-growing companies of the early Internet age.
The latest round of layoffs comes a year after the networking equipment-maker cut 6,500 jobs in an effort to drop its expense line and to stay competitive as customer spending slows and the company faces increasing competition, including some from new IPO Palo Alto Networks (NASDAQ: PANW), which began trading on the Nasdaq last week.
In May, the company forecast quarterly revenue growth of two to five percent for its fiscal-fourth quarter, far below the strong double-digit gains Cisco enjoyed for more than a decade.
The layoffs may be an early reflection of how a global economic slowdown may be hitting home. Cisco's business lines face multiple threats, including weaker spending by governments, and a decline in orders from large corporate customers. The latest quarterly report also detailed multiple concerns about Europe's debt crisis and sales growth in the region.
It also may suggest that business has not yet picked up. Analysts are expecting revenue growth for Cisco's fiscal fourth quarter, expected to be reported August 15, of about 3.8 percent.
Cisco's Europe, Middle East and Africa region boosted revenue 4.6 percent in the quarter ended April; U.S. revenue rose 3.2 percent.
Cisco shares fell about 1.4 percent to $15.85 in premarket trading.
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