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Published: Thu, August 18, 2016
Economy | By Melissa Porter

Cisco to slash 14000 jobs


San Jose, California-based Cisco is expected to reveal details about the cuts within the next few weeks. According to sources, Cisco job cuts stem from its transition as a hardware company to a software-centric company.

Cisco Systems, Inc. reported Actual EPS of $0.57/Share whereas, the Analyst Estimated EPS was $0.55/share. Two years later, in August 2015, it reported annual revenues of $49.2 billion and net income of $9 billion. In fact, the combined headcount of Cisco employees in the United Kingdom crosses 7,000 employees.

Cisco has been trying to buy its way into the cloud market.

"Today, we announced a restructuring enabling us to optimise our cost base in lower growth areas of our portfolio and further invest in key priority areas such as security, IoT, collaboration, next generation data centre and cloud". It is also venturing towards security and management tools, which are less expensive and more resourceful.

Cisco's traditional business of switches and routers has been struggling with sluggish demand from telecom carriers and enterprise customers and intense competition from companies such as Huawei and Juniper Networks Inc.

Cisco will report Q4 earnings on Wednesday after the close in NY.

The company has already offered many early retirement package plans to Cisco's employees, CRN said. The company's last retrenched staff in 2014, when it cut 6,000 jobs.

In February 2016, Cisco announced that it will acquire Jasper Technologies, a startup which makes software for connecting internet devices.

"We had another strong quarter, wrapping up a great year", Cisco CEO Chuck Robbins said in a statement. Its second largest division routing showed a 5 percent drop in sales to $1.89 billion.

This would be at least the third large-scale layoff the networking giant has announced since 2011. The company has its Price to Sales (P/S) ratio of 3.15 where Price to Book (P/B) ratio of 2.49, Price to Cash Per share (P/C) of 2.45 and Price to Free Cash Flow (P/FCF) has a value of 42.19. If the rumours are true, the job cuts would be the biggest bloodletting in its 32-year existence. HP Inc said in February it would cut about 3,000 jobs by the end of fiscal 2016.

Cisco Systems, which briefly stalled its ritual annual layoffs last year, resumed it this year doubling the number it is sending home at 14,000, nearly 20% of its total workforce this year.

A Cisco spokeswoman told Sky News the company does not comment on speculation and rumour.

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