Cisco axes another 5,500 on the back of good profits

Cisco is making another 5,500 staff redundant on the back of stagnant full year sales results of $49.2 billion, and a 2 percent dip in sales for the fourth quarter. Despite the lower sales, net income for the year jumped 20 percent to $10.7 billion.

The staff cull represents around 7 percent of the company’s global workforce, and follows similar cuts in 2012, 2013 and 2014, although major reductions were not made last year.

With revenues from networking hardware on their way down, Cisco is now expected to focus on services and software- and cloud-based security and networking offerings, including software-defined networking (SDN) solutions

There were reports that surfaced this week that the jobs cull this time round could actually reach 14,000, which would have represented about 20 percent of the global workforce.

Rumoured lay-offs at major US technology companies are often over-estimated. Going into cynicism mode the lower actual job cuts eventually reported can be dressed up by the companies themselves as something positive, and which “aren’t as bad as expected”.

It is not clear at this stage how many Cisco staff will be made redundant in the UK. The company employs around 5,000 in the UK in over a dozen towns and cities, including London, Manchester and Edinburgh.

For his part, Cisco CEO Chuck Robbins said of the results: “We had another strong quarter, wrapping up a great year. I am particularly pleased with our performance in priority areas including security, data centre switching, collaboration and services.

“We continue to execute well in a challenging macro environment. Despite slowing in our service provider business and in emerging markets after three consecutive quarters of growth, the balance of the business was healthy with 5 percent order growth.”

He added: “Our product deferred revenue from software and subscriptions grew 33 percent showing the continued momentum of our business model transformation.”

@AntonySavvas