* Job cuts to amount to about 14 pct of workforce-Bloomberg
* 7,000 to go by end-Aug, early retirement packages for
* Analyst estimated earlier Cisco may cut 5,000 jobs
* Co. to provide details on its next earnings call on Aug 11
(Adds Cisco comment)
SAN FRANCISCO, July 11 Networking equipment
company Cisco Systems Inc could eliminate as many as
10,000 jobs, or about 14 percent of its workforce, to revive
profit growth, Bloomberg said, citing two people familiar with
As many as 7,000 jobs would be eliminated by the end of
August, the people told the agency. Cisco is also providing
early-retirement packages to about 3,000 workers who took
buyouts, according to Bloomberg.
Early on Monday, Reuters reported that Cisco may slash about
5,000 jobs to meet Chief Executive John Chambers' goal of
slashing costs by $1 billion. Reuters had cited Gleacher & Co
analyst Brian Marshall.
"As we announced on our Q3 earnings call, Cisco will take
out $1 billion in costs from our FY 12 expense run-rate as part
of our efforts to streamline company operations, including a
planned reduction in workforce. We will provide additional
detail on the cost reductions, including layoffs, on our next
earnings call on Aug 11," Cisco spokeswoman Karen Tillman told
Cisco shares closed down about 2 percent at $15.43, in a
market that was broadly lower due to concerns about the U.S.
budget talks and the euro-zone debt crisis.
REVENUE GROWTH UNDER PRESSURE?
Chambers, who is set to speak at a company event in Las
Vegas on Tuesday, is working to turn around the Silicon Valley
bellwether. He has said the company's next fiscal year starting
in August would not live up to the company's previous growth
Marshall's estimate for job cuts at Cisco is higher than the
previous forecasts of up to 4,000 jobs that are in danger of
The pending job cuts "will help right the ship" and achieve
a reduction in operating expenses by about $1 billion annually,
Marshall said in a note to clients.
Cisco would also need to lower its long-term revenue growth
target to about 10 percent from a forecast of 12 percent to 17
percent, Marshall said.
Cisco's revenue has increased 11 percent over the past five
Cisco warned in May that it planned to trim its workforce as
part of a plan to cut some $1 billion in costs from its annual
budget but did not disclose how many jobs would be cut.
Cisco's previous record layoffs came in 2001, when the
company shed some 8,000 jobs, Marshall said.
(Reporting by Poornima Gupta, Sakthi Prasad and Jim Finkle;
Editing by Muralikumar Anantharaman and Mike Nesbit)