WASHINGTON - Global networking giant Cisco Wednesday announced a major restructuring that will see it shed around 6,000 workers, or 8 percent of the workforce, while reporting 1 percent decline in fourth quarter net income, to $2.25 billion, or 43 cents per share, as revenue dipped to $12.36 billion from $12.42 billion in the corresponding quarter last year.
For fiscal 2014 overall, Cisco posted $47.1 billion in revenue, down three percent on an annual basis, with non-GAAP earnings of $2.06 per share.
The San Jose, California-based company said the layoffs will affect workers in operations around the world.
Making the announcement during a conference call discussing its fiscal fourth-quarter earnings, CEO John Chambers said, "We are executing well in a tough environment and delivered our best non-GAAP earnings per share quarter in our history. I'm pleased with how we are transforming our company over the past several years and that journey continues.
"We are focused on growth, innovation and talent, especially in the areas of security, data center, software, cloud and internet of everything. Our strategy is sound, our financials are strong, and our market leadership is secure. We have the team in place to deliver and are uniquely positioned to help our customers solve their biggest business problems."
Chambers said he was confident that Cisco's last report, in May, wasn't a fluke and the market for corporate IT spending is improving overall though in emerging markets, in particular, there has been a decline which is forecast to continue over the next few quarters. In 15 of the emerging markets sales were collectively declining in order rate by 9 percent.
The company is adapting to some troublesome markets. During the quarter challenges in the service provider market continued, with sales to that group of customers down 11 percent, and orders down 13 percent, year over year
Chambers and Chief Financial Officer Frank Calderoni also revealed that Cisco will be undergoing some significant "restructuring," which translates to layoffs.
Although a timeline hasn't been revealed, the cuts will reduce Cisco's workforce by approximately eight percent, rounding out to roughly 6,000 jobs. The executives said the changes would be worth approximately $700 million, with about $250 million to $350 million being recorded in the current quarter.
This is the second major restructuring in a year: last August, the company said it would cut 4,000 jobs to re-align Cisco's resources and respond more quickly to market changes.
Speaking of "disruption" that is happening across the industry to peers, Chambers said, "If we don't disrupt ourselves we will get left behind."
The company, which makes routers, switches and software, made some major acquisitions at the end of the year including threat intelligence and analysis firm ThreatGRID, browser infrastructure designer Assemblage, and multi-vendor network services and solutions provider Tail-f Systems.