Transition in the Workforce- Cisco Systems Inc (NASDAQ:CSCO) Cuts another 6,000 Jobs

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By Joseph Carducci on August 15, 2014 Company, Energy & Solar

Cisco Systems Inc (NASDAQ:CSCO), one of the biggest America-based company that manufactures networking machinery and equipments, recently predicted very moderate results for its current quarter. The company further said that it plans on cutting down another 6000 jobs. It is pertinent to note here that the company has introduced a new cycle of its routers and switches, and the reduction in jobs is the result of this new cycle.

There was a time when Cisco Systems Inc (NASDAQ:CSCO) was at its peak, known as the internet tycoon company; however, the company has been struggling hard lately in order to survive in the much competitive market environment. The recent layoff session resulted in the reduction of at least one third of the company’s total workforce.

Cisco Systems Inc (NASDAQ:CSCO), in 2011, announced that it planned on cutting down around 11,000 jobs. However, in 2013, the company said that it would reduce the jobs by 4,000.

Stocks of the company saw a decrease of 0.95 percent and reached to $24.96 in the early morning trading session on the last trade day, August 14, 2014.

John Chambers, the chief executive of the company was quite confident on the recent conference call that Cisco Systems Inc (NASDAQ:CSCO) held with the press. John Chambers commented that the market is ever changing and it does not stop for anyone. He further said that the company will lead the market once again; it is just a matter of time. The CEO further said that in order to reach the top, all companies have to take very tough decisions. According to John, the company will make its process more efficient and will reduce the costs effectively.

The CEO also blamed instability in the demand of company’s products for the job cuts that it made recently.

Analysts are of the view that the company will face challenges for a number of new rival firms are entering the market of networking equipments, which has made the sales of Cisco Systems Inc (NASDAQ:CSCO) sluggish. The company saw a sales decrease of 13 percent and 23 percent in the region of Brazil and China respectively.

The company saw an increase of 2 percent and 1 percent in the product orders sector in the areas of Europe and America, and Africa and Middle East respectively. However, this increase was undermined by a sales reduction of 7 percent in the region of Asia.

Zeus Kerravalla, an analyst at ZK research, said that Cisco Systems Inc (NASDAQ:CSCO) has been reporting mixed numbers lately. He further commented that the recent strategic step taken by the company would transition its work force, which was the right thing to do.

Cisco Systems Inc (NASDAQ:CSCO), on the last trade day, August 14, 2014, opened its stocks at a price of $24.94 and closed at a reduced price of $24.54. The intraday range for the company was recorded to be from $24.32 to $24.94.

As far as the market capitalization of Cisco Systems Inc (NASDAQ:CSCO) is concerned, the numbers are reported to be around $129.09 billion. It has a price to earnings ratio of 16.64 and a dividend yield of 3.10 percent.