Cisco Systems has announced a workforce reduction plan as part of its rebalancing that will impact approximately 4000 employees or 5% of company’s global workforce. Company expects to implement its workforce reduction plan during the start of first quarter of fiscal 2014, Cisco said in a filing to the US SEC on Wednesday. However, company hasn’t mentioned, which business unit will face job cut.
In an email to Sourcefire management filed with the US SEC, Christopher Young, Senior Vice President, Security Group, Cisco Systems, said, “Despite our strong FY 13 results, Cisco continues to face a challenging macroeconomic environment. We have seen two things change: first, the economic recovery is slower and more inconsistent, with global GDP continuing to tick down for calendar year 2013 and global challenge across in Southern Europe, several of the emerging markets, and Asia Pacific; and second, the pace of change is continuing to increase.”
“In this environment, Cisco is focused on aligning resources to our top opportunities, balancing expenses to revenue, driving efficiencies in the business, and investing in growth. During our earnings call today, we announced that in order to execute on the portfolio investment and operational efficiency opportunities we see in fiscal 2014, we are rebalancing our resources with a workforce reduction which will impact approximately 4,000 employees or 5% of our global workforce,” added Young.
Further, Cisco’s top executive clarified that Sourcefire will not be part company’s job cut plan.
“I want to be very clear that Sourcefire employees and management will not be impacted by this workforce reduction. Consistent with our long-term goal to be the #1 IT company in the world, we expect to continue to invest in our top opportunities, including security,” said Young.
Last month, NASDAQ listed Cisco agreed to acquire the security firm Sourcefire for $2.7 billion to strengthen its security portfolio.
However, Cisco’s job cut plan has come a bit surprise to the industry, since the San Jose headquartered networking giant posted a $48.6 billion revenue for the ended fiscal 2013 as per GAAP, which is a 6% more than previous the year. In fact, fourth quarter revenue rose 6.2% at $12.4 billion compared $11.7 billion same quarter in 2012.
“My confidence in our ability to be the #1 IT Company is increasing. Our fourth quarter was a record on many fronts, with record revenue, and record non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share. In every case, we exceeded the midpoint of our guidance. We also generated $4 billion in operating cash flow in the quarter, another record,” stated John Chambers, Cisco Chairman and CEO.
“Now, more than ever, our customers and our partners want Cisco’s help navigating the inconsistent global landscape successfully. They recognize the benefit of a partner who is not only the leader in their product categories, but can bring technologies and solutions together in an architecture to lower operating costs, reduce time to results and future proof their investments,” Chambers said in a statement.
