'Good business management' as Cisco cuts 4,000 jobs

Cisco plans to cut 4,000 jobs as it battles against a slow paced industry and uncertain demand for networking equipment.

Bemoaning the lack of growth in the industry, CEO John Chambers claimed the company had no choice but to cut 5% of its workforce, revealed during a conference call following its quarterly earnings.

"The environment in terms of our business is improving slightly but nowhere near the pace that we want," he said.

"We just have too much in the middle of the organisation. It's just not growing at the speed we want.

"We have to very quickly reallocate the resources."

As a result of the proposals, Chambers plans to make cuts across the company, whether through job losses or relocation to more profitable roles within the business.

"This is just good business management," Chambers said. "I've learned in this business, you lead with your mind, not with your heart."

Earnings

Aside from the planned job losses, the company posted revenue of US$12.4bn during the fourth quarter, representing a 6% rise from the same period last year, along with an 18% profit rise to $2.3bn.

"My confidence in our ability to be the #1 IT Company is increasing," said Chambers, despite the job losses.

"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."

Chambers said the business also generated $4bn in operating cash flow during the quarter, claiming it to be "another record."

"Now, more than ever, our customers and our partners want Cisco's help navigating the inconsistent global landscape successfully," he said.

"They recognise the benefit of a partner who is not only the leader in their product categories, but can bring technologies and solutions together in an architecture to lower operating costs, reduce time to results, and future proof their investments."