Cisco (CSCO) to Cut Thousands of Jobs
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Price: $121.31 +2.54%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.7%
EPS Growth %: +18.2%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.7%
EPS Growth %: +18.2%
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Cisco Systems (Nasdaq: CSCO) is expected to commence a massive headcount reduction before the end of summer.
According to Bloomberg, citing people familiar with the move, Cisco may cut as many as 10,000 positions through the end of August. Early retirement packages will be provided to about 3,000 employees.
With Cisco employing roughly 70,000, this amounts to about a 14 percent trim.
Job cuts will help Cisco to save about $1 billion in its 2012. Costs associated with the early retirement program might range from $500 million to $1.1 billion, Cisco reported in its last quarterly filing.
The news comes as pressure from Juniper Networks (Nasdaq: JNPR) and Hewlett-Packard (NYSE: HPQ), among others, are taking market share from Cisco in its bread-and-butter switching category. Cisco has provided investors with lackluster earnings reports and guidance as a result of the market share losses, and CEO John Chambers has also come under fire from the investing community.
Cisco's FY11 revenues should grow about 7 percent to $43 billion, slowing from the 11 percent growth realized in FY10.
Shares of Cisco are trading 1.2 percent lower early Tuesday.
According to Bloomberg, citing people familiar with the move, Cisco may cut as many as 10,000 positions through the end of August. Early retirement packages will be provided to about 3,000 employees.
With Cisco employing roughly 70,000, this amounts to about a 14 percent trim.
Job cuts will help Cisco to save about $1 billion in its 2012. Costs associated with the early retirement program might range from $500 million to $1.1 billion, Cisco reported in its last quarterly filing.
The news comes as pressure from Juniper Networks (Nasdaq: JNPR) and Hewlett-Packard (NYSE: HPQ), among others, are taking market share from Cisco in its bread-and-butter switching category. Cisco has provided investors with lackluster earnings reports and guidance as a result of the market share losses, and CEO John Chambers has also come under fire from the investing community.
Cisco's FY11 revenues should grow about 7 percent to $43 billion, slowing from the 11 percent growth realized in FY10.
Shares of Cisco are trading 1.2 percent lower early Tuesday.
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