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Cisco to cut 4,000 jobs as sales growth slows

2013-08-15 08:30:00| Telecompaper Headlines

(Telecompaper) Cisco's fourth-quarter revenues increased 6.2 percent year-over-year to USD 12.4 billion. Switching revenue rose 5 percent to USD 3.80 billion, and IP routing was flat at USD 2.09 billion. Cisco said its book-to-bill ratio for the quarter was "comfortable above 1", with orders up 4 percent from a year earlier. This includes 5 percent growth in the Americas and 6 percent higher orders in EMEA, while in Asia, orders fell 3 percent. Cisco CEO John Chambers said in a conference call that the market was not improving fast enough and the company would have to reduce costs. "What we see is slow steady improvement, but not at the pace we want," he said. As a result, the group plans to cut 4,000 jobs or around 5 percent of its workforce, the Wall Street Journal reported from the call. This will result in pretax charges of up to USD 550 million. For the current quarter, Cisco forecast revenue growth to slow to 3-5 percent. Net profit for the three months to 27 July was USD 2.3 billion or USD 0.42 per share, up 18.4 percent from USD 1.9 billion or USD 0.36 per share a year earlier. Cash flow from operations increased to USD 4.0 billion from USD 3.1 billion, and the company finished the period with USD 50.6 billion in cash.

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