Cisco Systems is to axe up to 4,000 jobs over the next few months as part of a plan to save $1 billion.
This is the biggest cull of Cisco's workforce to date, double that of its previous record job slash in 2002 after the internet bubble burst, reports Reuters.
Cisco has 73,000 staff, making the cuts 5.5 per cent of its total workforce. It's a relatively small number percentage wise, but that's a lot of people left jobless in an uncertain economic period. However, Cisco may not feel the need to axe the full 4,000 jobs, with many analysts believing it could get away with 3,000, which is still a significant number.
The job losses are likely to predominantly come from industry sectors where Cisco is performing badly, as Cisco's CEO and chairman John Chambers indicated that the company would be pulling out of these areas.
One of the departments that was first to go was Cisco's Flip video camera business. 550 jobs were lost when the company decided to close up shop there last month.
The upcoming job cuts follow woeful performance in Cisco's fiscal third quarter, where its net income was down 17.6 per cent from $2.2 billion to $1.8 billion. Earnings per share were also down from $0.37 to $0.33, a fall of 10.8 per cent.
Speaking about the poor third quarter performance, Chambers said: “This quarter played out as we expected. We have acknowledged our challenges. We know what we have to do. We have a clear game plan.”
Sacking staff it is, then.