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Thursday, August 15, 2013

Daily Report: Cisco to Cut 4,000 Jobs, Despite Rising Revenue

SAN FRANCISCO - Cisco Systems, the technology industry’s biggest maker of computer infrastructure equipment, said on Wednesday that it planned to cut 4,000 jobs, or roughly 5 percent of its work force, in an effort to trim costs and reorganize during what executives described as a “challenging” global economic climate, Jenna Wortham reports.

The cuts were announced even as Cisco, which sells networking software and services and videoconferencing systems, reported better-than-expected earnings in the fourth quarter of its fiscal year.

John Chambers, the company’s chief executive, said that despite the promising figures, the company still faced significant challenges in the coming months.

In a conference call on Wednesday with investors and analysts, he said Cisco needed to improve its ability to react quickly to market changes.

“We’ve got to take out middle-level management,” he said. “What I’m really after is not speed of decisions but speed of implementation.” He said the company’s performance had improved over the last year, but that “it’s just been slow.”

Cisco reported that earnings rose to $2.27 billion, or 42 cents a share, in the fourth quarter from $1.92 billion, or 36 cents a share, in the period a year earlier, while revenue rose 6 percent, to $12.42 billion, from $11.69 billion. Analysts had expected the company to report revenue of $12.41 billion. Sales in the United States were strong, but international sales were a concern.