Cisco Cuts 4,000 Jobs Amid New Cloud Focus
Cisco Systems is cutting 4,000 jobs, or 5% of its workforce, as it renews cost-cutting to refocus on growth areas in the face of uncertain demand for its products.
Shares in the world's biggest network equipment maker fell more than 9% in after hours trading, their biggest drop in more than a year if reflected on the Nasdaq on Thursday.
A lukewarm revenue forecast was seen as dashing expectations that Cisco could overcome muted demand for tech infrastructure.
Cisco has been whittling away at its workforce and selling off consumer businesses such as home networking, in a turnaround that started in 2010 when it started losing ground to nimbler rivals.
The company that once specialised in providing the backbone of the Internet now sees software and equipment for datacentres and corporate cloud networking as its keys to growth.
Analysts said that the company's statement suggested that the pace of expansion had been slower than anticipated, with demand in Europe and Asia remaining a challenge.
Cisco forecast 3%-5% revenue growth in its current quarter, toward the low end of expectations, as it continues to grapple with an uncertain global IT spending environment.
In a conference call with investors, chief executive John Chambers said: "The environment in terms of our business is improving slightly but nowhere near the pace that we want.
"We have to very quickly reallocate the resources."
Cisco said last month it planned to buy cybersecurity company Sourcefire for $2.7bn (£1.74bn).
The company has made it a priority to improve security across its hardware, software and cloud products.