Cisco to Lay Off 1,100 More Workers
May 17 2017 - 5:24PM
Dow Jones News
By Anne Steele
Cisco Systems Inc. said it would lay off another 1,100 employees
and forecast a drop in quarterly revenue as the networking company
contends with market shifts, including customers favoring software
over hardware.
The fresh round of cuts expands a previous restructuring plan
announced last August that was designed to cut 5,500 jobs, or 7% of
Cisco's workforce at the time. According to a company filing,
Cisco's head count as of Jan. 28 -- amid the first round of cuts --
was 71,959.
Shares of Cisco fell 5.4% to $32 after hours as the company also
said revenue ticked down in the fiscal third quarter and would drop
more sharply -- by 4% to 6% -- in the fourth quarter.
Cisco, which disclosed the layoffs in its quarterly earnings
report, said it has booked charges of $614 million during the first
nine months of the fiscal year and expects to book $150 million to
$200 million more during the fourth quarter.
Cisco Chief Executive Chuck Robbins is trying to shift the
business from hardware to software and services. The company is
making gains in areas such as security, but it faces weak customer
spending in its core networking hardware businesses.
For the quarter ended in April, Cisco's revenue edged 0.5% lower
to $11.94 billion, as a decline in service revenue more than
outweighed a modest uptick in product revenue. The company earned
$2.52 billion, or 50 cents a share, up from $2.35 billion, or 46
cents a share, a year ago. Excluding certain items, adjusted
earnings rose 3 cents to 60 cents a share.
Analysts polled by Thomson Reuters were looking for an adjusted
58 cents a share on $11.89 billion in revenue.
Total operating expenses were 8.2% lower from a year ago as the
company spent less on research and development, sales, marketing
and overhead.
For the final quarter of the fiscal year, Cisco said it expects
adjusted profit of 60 cents to 62 cents a share, compared with the
average analyst estimate of 62 cents.
--Rachael King contributed to this article
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
May 17, 2017 17:09 ET (21:09 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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