In an earnings call for its fourth quarter (Q4) financials, it was left to the company’s chief financial officer (CFO), Frank Calderoni, to reveal the cull, which is set to come into force in the first quarter (Q1) of its 2014 fiscal year.
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“In the past two years, we have managed the business with discipline and focus,” Calderoni said. “To execute on the portfolio investment and operational efficiency opportunities that we see in fiscal year 2014, we are rebalancing our resources with a workforce reduction, which will impact approximately 4,000 employees or 5% of our global workforce.”
The company’s CEO John Chambers confirmed that some of the staff would be reallocated to “new growth opportunities” in the company, but refused to give details of which parts of the business would be affected, or which regions.
“The most difficult decisions we make as leaders are those that impact our employees,” Chambers said. “However, we will always take the necessary actions to efficiently manage our business for the long run.”
Cisco reported quarterly revenues of $12.4bn, up 6% year-on-year, along with an 18% rise in profit to reach $2.3bn for the three-month period, equalling record results for the firm.
While the company celebrated improved results in Europe, Chambers revealed Cisco was struggling in the emerging markets, especially China where sales were down.
“In our Asia-Pacific, Japan and China operations, we saw the same weakness many of our peers experienced, with orders down 3%, along with economic challenges impacting several of our top five emerging markets,” he said.
“Last quarter, I described a continued slow recovery and I have not seen anything to suggest that this dynamic will change in the short term, but this recovery is more mixed and inconsistent than the others I’ve seen.”
As a result, Cisco has released a modest forecast for the next quarter, predicting year-on-year growth of between 3% and 5%.
Chambers concluded: “We are going to focus on aligning our resources to our top opportunities, speeding up the decision cycles and time to implementation, balancing sheet expenses to revenues and driving efficiencies in the business, while investing in growth.”