Cisco prepares to take $700m hit to make 6,000 layoffs
Fiscal 2015 pain includes severance pay and benefits
Cisco has said that it will be hit with $700m in charges in fiscal 2015 in the restructuring plan that will see the firm axe 6,000 employees.
The company said in a regulatory filing that it expects to recognise around $250m to $350m of these charges in the first quarter of the next financial year and the rest throughout the year. The charges will consist of severance pay and other termination benefits and costs of letting eight per cent of its global workforce go.
Cisco announced the latest round of layoffs as part of its financial results earlier this week.
Although the firm managed to beat its guidance for revenue decline of between one and three per cent – registering just a 0.5 per cent dip instead – chief exec John Chambers said times were tough in emerging markets, where Cisco had been hoping to see more growth. The firm said that sales fell by 23 per cent in China in the quarter and by 13 per cent in Brazil.
The network tech maker has endured round after round of cuts since the global financial crisis, averaging around one a year for the last four years.
Like many older tech firms, the company is trying to focus in new areas like cloud computing and the Internet of Things to bring in new revenue streams. Cisco has also branched out from switches and routers into servers, but faces stiff competition from existing competitors Juniper Networks and Huawei and server kings like HP and IBM. ®