Cisco Systems, Inc (NASDAQ:CSCO)’s CEO goes vocal
Cisco Systems, Inc (NASDAQ:CSCO)’s Chief Executive Officer, John Chambers stated that the 5% job-cut plan that the company is considering is one segment of its strategy to boost growth. This 5% cut amounts to 4,000 jobs which in today’s stringent employment market is a very large number.
In a CNBC interview, Chambers said that the market is very fast-paced and the company is reorganizing and channelizing its resources where growth opportunities present themselves. He went on to say that the resource reallocation will be implemented over 2 quarters. He also said that his past mistakes had taken place because he had not matched the pace of the market.
The CEO says
The resources will be reallocated in various technologies such as mobility, cloud computing and internet products. He also spotlighted the fact that the company was the no.1 performer in cloud computing in the previous quarter and that in terms of mobility, it has the very best architecture. Chambers said that the resources have to be moved out of traditional businesses and that all these efforts are investments for the future. He said that equilibrium has to be maintained in terms of the source of those resources.
The tough stand
The one strong message that the CEO was sending-out was that he was more than willing to make all those tough decisions that would be right for the company’s shareholders, employees as well as for consumers over a period of time. In addition, he said that the details of the layoffs will be discussed with the employees in a conference. He also emphasized upon the point that no jobs were being moved overseas.
In the Q4 earnings results, CSCO reported an income of $2.27B or earnings per share of $0.42. In the same period in 2012, the company had posted a net income of $192B and EPS of $0.36. The revenue stood at $12.42B which was an increase of 6.2% from the $11.69B that it stood at a year ago.