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Networking sales slowdown heralds UK IT recession

Kris Sangani
The first signs that the US recession has crossed the Atlantic have emerged with the cancellation of orders for networking equipment.

Kris Sangani

An industry source claims that telecoms companies BT and Cable & Wireless have cancelled orders for high-end Cisco equipment due to a predicted slowdown in IT spending in the UK.

BT, Cable & Wireless and Cisco have refused to comment on the claims but a spokesperson for Cisco in the UK said that the networking company expects market conditions to be considerably tougher in the next few months.

"We have to make cutbacks in times of uncertainty in the global economy. But we are confident that sales will remain strong over the longer term," she said.

"I understand that Cisco have lost significant business [from BT and Cable & Wireless] - not to competitors, but to a cutback in capital expenditure by these telecom companies," an industry source said.

Cisco has confirmed that it is to cut around 8,000 jobs worldwide in the next few weeks, due to slowing sales. John Chambers, Cisco's chief executive said, "We're taking these steps because of the continuing slowdown in the US economy and initial signs of a slowdown expanding to other parts of the world."

In addition to the redundancies, the company is maintaining a hiring freeze and making significant cuts in its contract workforce. The company also plans to reduce its annual travel budget by 60 %.


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