Cisco will cut 4,000 jobs as it seeks to reduce costs amid uncertain demand for networking products in coming quarters.
4,000 employees or five percent of its workforce will lose their jobs starting in the first quarter of 2014.
The job cut is primarily aimed at reducing costs and refocus on growth areas as it faces uncertain demand for its networking equipment.
In fact, Cisco’s headcount increased to 75,049 in Q4 FY 2013 from 74,157 in Q3 FY 2013 and 66,639 in Q4 FY 2012.
The recent acquisitions have increased the headcount at Cisco.
Two years ago, Cisco started a plan to cut expenses by $1 billion, including a 15 percent reduction to its workforce.
“The environment in terms of our business is improving slightly but nowhere near the pace that we want,” said Cisco CEO John Chambers.
Cisco is expecting 3 percent to 5 percent revenue growth to $12.2 billion to $12.5 billion in the current quarter. But the revenue growth is toward the low end of expectations, as it continues to grapple with an uncertain global IT spending environment.
Meanwhile, Cisco revenue increased 6.2 percent to $12.4 billion, while net income rose 18.4 percent to $2.3 billion in fourth quarter of fiscal 2013.
Service provider video, switching, wireless and data center business chipped in the growth. NGN routing and security posted nil growth, while collaboration dipped 2 percent.
Cisco’s revenue in Americas increased to $7.35 billion in Q4 FY 2013 from $6.89 billion.
The networking giant’s EMEA revenue increased to $3.14 billion from $2.82 billion.
Revenue from APJC — including India — fell to $1.92 billion from $1.98 billion, indicating that Cisco needs to rework its strategy in China, where the networking major faces tough political and market conditions.
In FY 2013, Cisco’s revenue increased 5.5 percent to $48.6 billion. Net income rose 24.2 percent to $10 billion.
Cisco’s product revenue increased to $38.02 billion in FY 2013 from $36.32 billion, while service revenue fell to $9.73 billion from $10.57 billion.