Bloomberg: Cisco to cut 10,000 jobs this year
More woe for Cisco (NASDAQ:CSCO) as Bloomberg, citing two people familiar with the plans, reported that as many as 10,000 employees will be cut from the payroll this year. It said 7,000 would be let go by August and another 3,000 would be offered early retirement incentives. Monday, Gleacher & Co. analyst Brian Marshall said 5,000 jobs likely would be cut.
The 14 percent reduction in its workforce is part of CEO John Chambers' efforts to cut $1 billion in expenses to stem the networking giant's bleeding. The company has seen its share of the switching market, which brings in about half of its revenue annually, shrink as competitors like Juniper Networks (NYSE:JNPR) and Hewlett-Packard (NYSE:HPQ) have increased shares and driven down prices.
"The revenue trajectory hasn't been where it should be," Marshall said. "The company is not staffed on an appropriate level. They simply have too many employees."
In May, Chambers said he would trim the company's workforce and cut underperforming units and products to help bring expenses in line with revenue.
Cisco's revenue is expected to reach $43 billion this year, a 7 percent increase, but off the 11 percent pace it set in 2010.
- see this Bloomberg article
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So, tell me, is Cisco really holding a fire sale? Why?