The largest network equipment manufacturer in the world, Cisco, announces unprecedented layoffs: 4000 employees. The amount represents about 5% of the American workforce giant, citing the difficult economic situation.
Cisco Systems was created in December 1984 by 2 members of Stanford University computer assistance employees : Leonard Bosack the responsible for the computer science department's computers, and Sandy Lerner , the supervisor of Graduate School of Business' computer systems. The american multinational corporation is headquartered in San Jose , California , that designs , manufactures , and sells networking equipment .The stock was included with the Dow Jones Industrial Average on June 8 , 2009 , and is also incorporated into the S&P 500 Index , the Russell 1000 Index , NASDAQ-100 Index and the Russell 1000 Growth Stock Index.
Cisco's profit rose 18% in May-July, the fourth fiscal quarter, to 2.27 billion, while revenues were up 6%, to 12.4 billion dollars.
The Company expects to incur additional costs of $ 550 million after dismissal. Cisco Systems currently has 75,000 employees.
The general manager of Cisco, John Chambers, said the layoffs are due to disappointing pace of global economic recovery.
While orders in the Americas were up 5% in the quarter ended in July, won contracts in Asia dropped by 3%, said Chambers.
Cisco shares fell 9.5% in trading on the New York Stock Exchange.
Network equipment industry often feels trends in the economy earlier than other sectors of IT & C.
Cisco Systems has developed a campaign to layoffs in the financial and economic crisis. In 2011, the company began a redundancy plan targeting 6,500 employees, yet there have been 10,000 layoffs.