San Jose, California-based Cisco Systems Inc. stated that it is planning to lay off about 6,000 employees after the company reported little growth in the recently ended quarter.
The 6,000 employees, equivalent to about 8 percent of Cisco's global employee head count, will be let go as the company looks do a limited restructuring to cut costs.
The new planned layoffs follow last year's decision to cut 4,000 employees, which was then equivalent to 5 percent of the company's global employee head count.
Cisco reported its expectations of recording pretax charges of an amount up to $700 million as costs for the planned restructuring.
The networking hardware company continues to face challenges in emerging markets, in addition to finding difficulties in making sales to cable companies and other kinds of service providers.
Cisco's results for the recently concluded fourth quarter of the company's financial year exceeded expectations set for the company, which may signal that the company is finally emerging from the slowdown that it has suffered from recently.
However, Cisco has not regained its growth, with the net income for the quarter decreasing by 1 percent on revenue that declined by 0.5 percent.
Cisco's net income for the fourth quarter of the financial year is $2.25 billion, equivalent to 43 cents per share, compared to $2.27 billion, equivalent to 42 cents per share, in the corresponding quarter last year. Revenue decreased from $12.4 billion to $12.36 billion.
Cisco CEO John Chambers said that the company is expecting revenue for the ongoing first quarter of the financial year to remain the same or increase by 1 percent compared to the corresponding quarter last year.
However, Chambers said that Cisco is also expecting continuous declines in its service provider video business, which suffered a 10 percent decline in the past quarter. Chambers also expects the company to continue to struggle in emerging markets, namely China, Mexico, Brazil, Russia and India.
While Cisco is best known for its business concerning server systems for the Internet, the company has entered other markets by acquiring other companies. New markets for Cisco include TV set-top boxes, computer security and video conferencing, with the company also planning to offer cloud computing services.
Switching systems for server systems remains as Cisco's biggest business, amid increasing competition in the market. Cisco's newest switching system, the Nexus 9000, has only started receiving orders, with Chambers saying that it could take some time before the company is able to reach significant sales for the new system.
