Networking giant plans to cut 5% of workforce, despite increased profits

Cisco raises the axe over 4,000 employees

Network giant Cisco Systems is preparing to cut 4,000 jobs, despite an increased net income in the fourth quarter.

Cisco’s John Chambers cited weak sales in Japan, China and Europe as responsible for a ‘slower and more inconsistent’ economic recovery than expected, with the company’s own predictions said to be at the lower end of analysts’ revenue forecasts.

The move comes just after Cisco’s announcement that the company had increased its fourth quarter net income to $2.3bn, an increase of $0.4bn on the previous year. In after-hours trading, Cisco’s shares fell by almost 10%.

The cuts aren’t the first time that the American company has made massive cuts. Two years ago 6,500 employees were axed, with another 5,000 transferred to Asian manufacturer Foxconn, the controversial producer of several Apple products and the Playstation 3.

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