SAN JOSE, Calif. (AP) - Cisco Systems is
preparing to lay off about 1,300 workers just a few months after the
world's largest maker of computer networking equipment warned that
growing economic uncertainty is making it tougher to close sales with
its customers.
The cuts announced Monday represent about 2 percent of Cisco System Inc.'s payroll of 65,000 workers.
The upcoming layoffs
represent the company's latest austerity measure. Last year, Cisco shed
about 10,000 jobs as part of a program aimed at saving about $1 billion
annually.
Cisco says it is shedding
jobs to simplify its operations and adjust to changing economic
conditions around the world. The company, which is based in San Jose,
Calif., didn't specify what parts of its operations will be trimmed.
"We routinely review our
business to determine where we need to align investment based on growth
opportunities," the company said in a statement. "Additionally, we
continue to evaluate our organizational structure as part of our plan to
drive simplicity, speed of decisions and agility across Cisco."
The belt-tightening comes
after Cisco offered revenue guidance for its current quarter that was
well below Wall Street expectations. Cisco cautioned its revenue for the
period that ends this month is like to increase by as little as 2
percent from the same time last year. At the time that guidance was
issued in early May, analysts had been anticipating a revenue increase
of 7 percent.
Cisco CEO John Chambers
said the company might have to adjust to rapidly shifting economic
conditions beyond its control. In particular, he said the buyers of
Cisco's networking gear were becoming more reluctant to make big
purchases because of shaky economic conditions in Europe and other parts
of the world, including India.
"We will muddle through this with a little bit of bumps on the road," Chambers told industry analysts back in May.
Cisco's shares shed 29 cents, or nearly 2 percent, to close Monday at $16.07, then dipped another 20 cents in extended trading.
The company is scheduled to release its results for the current quarter on Aug. 15.
Cisco Systems San Jose headquarters (MGN)
