Cisco Systems (NASDAQ:CSCO, news, filings) reported a reasonably nice quarter, but the guidance looking forward didn’t make investors happy. And the announcement of layoffs of some 4000 worldwide didn’t make employees very happy either.
Revenues of $12.4B were generally as expected, as were non-GAAP earnings per share of $0.52. However, forward guidance of 3-5% growth was according to CEO John Chamers ‘slow, steady improvement, but not at the pace we want’.
Cisco cited ‘inconsistencies’ in the global macroeconomic environment as part of the reason for the workforce reduction, as opposed to competitive or operational pressures. Given the steady pace of acquisitions and the usual dose of economic caution we’re hearing most everyone maintain, a round of spreadsheet-driven, ‘we just need to be leaner’ layoffs doesn’t surprise me much at all.
But a 5% cut out of the blue is drastic enough to suggest they’re more worried about things than they’re letting on. That is perhaps why the stock price is off 10% in the premarket. And since they’re Cisco, everyone is listening.