Cisco is Eliminating Jobs

By Neil Zawacki
Updated: September 14, 2011

Cisco Systems has predicted that it will experience an annual sales growth of 5 percent to 7 percent by 2014, a notable downturn from the 12 percent to 17 percent the company had previously forecast for itself. Cisco also predicted the per-share earnings growth will be between 7 percent to 9 percent and that operating margins will be somewhere in the “mid-20’s” percentage range during this time period.

Dave Novesal, an analyst at Gimme Credit LLC, discussed Cisco’s predictions in a research report. He stated, “Although the new projections are woefully short of prior estimates, the good news is that Cisco intends to boost operating margins. The company plans to achieve the margin expansion via headcount reductions and other cost cutting measures.”

These headcount reductions have already begun - Cisco recently eliminated 12,700 jobs as part of a cost-reduction effort to revive sales growth. The company has also shed a large number of consumer businesses and scaled back the council-based management structure that it had previously used.

Despite these changes, John Chambers, the CEO of Cisco, stated that the company intends to be “very active” in smaller-sized acquisitions. He also indicated that he will stay at Cisco for the next three years and the board of directors and management are completely “in sync” with each other.

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