Date
24 November 2017
Cisco chief executive John Chambers said most of the savings from the latest job cuts will be reinvested in new businesses such as data centers and internet security. Photo: Bloomberg
Cisco chief executive John Chambers said most of the savings from the latest job cuts will be reinvested in new businesses such as data centers and internet security. Photo: Bloomberg

Cisco to cut 8% of staff as it rebuilds earnings

Cisco Systems will shed about 6,000 workers, or 8 percent of its staff, in a fresh round of job cuts that will bring the reduction in its workforce to 18,000 in the past three years, the Financial Times reported on Thursday.

John Chambers, chief executive of the San Jose, California-based networking equipment maker, said almost all of the savings from the latest job cuts, out of a total workforce of 74,000, would be reinvested in new businesses such as data centers and internet security.

The company said its revenue has stopped declining, although its business in developing countries has continued to shrink rapidly, partly because of revelations by intelligence whistleblower Edward Snowden that the company has been involved in US internet surveillance, according to the newspaper.

And despite the recent job cuts, Cisco’s headcount has risen by around 3,000 in the last three years due to acquisitions and other investments as it sought to expand beyond its core routing and switching business, it said.

Chambers said sales in the BRIC countries and Mexico fell around 12 percent in the latest quarter, and unlikely to return to growth for several quarters. 

He attributed most of the problems to slow economic growth in the developing world and “geopolitical issues” that have hit sales in countries like Russia, the report said.

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