Is it pinkslips time at Cisco? Predicting a significant drop in revenue for the fourth quarter, a JP Morgan analyst has reported that Cisco Systems Inc "could" soon announce a workforce reduction of 10 percent (this could be equal to about 6,600 employees).
In his 49-page first-quarter 2009 preview of communications equipment and networking companies, analyst, Ehud Gelblum, of JP Morgan wrote, "We expect Cisco to guide fourth fiscal quarter revenue down 17-22%, year over year, as demand continues to deteriorate, in-line with our estimate for a 21 per cent year over year decline," "We believe Cisco could also announce a 10% headcount reduction, which we calculate could save $900M annually," he wrote.
The recent lowering of sales projections by two of Cisco's competitor's Juniper Network and F5 Network has led to a similar speculation about the company.
Cisco spokesman reportedly refused to comment on JP Morgan report directly. However, in a statement he said that on our fiscal second quarter 2009 earnings call in February we discussed a limited restructuring where we could in the near term see a total reduction of between 1500 and 2000 jobs company wide. This does not represent a broad-scale layoff in our workforce.
The spokesman added that this limited restructuring is part of our ongoing, targeted realignment of resources. While Cisco constantly manages its business priorities, resources and overall employee alignment as part of our overall business management process, we are sensitive to the impact these decisions have on employees during this challenging economic environment. We are doing everything possible to minimize the impact on employees affected by the limited restructuring.
Indiatimes
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