Cisco Systems, one of the Triangle's biggest technology employers, plans to slash $1 billion in annual expenses as it undertakes a major reorganization that could result in significant job losses locally and worldwide.
CEO John Chambers is trying to revamp the company's operations to offset slowing sales, boost profit and restore investor confidence. As the company reported its latest quarterly earnings this afternoon, Cisco also gave a financial forecast for the current quarter that missed analyst expectations.
Cisco has previously disclosed that it's offering early retirement buyouts to thousands of U.S. and Canadian workers. Chambers told Wall Street analysts on a conference call today that various cost-cutting moves will save about $1 billion, but didn't say how many jobs he expects to eliminate.
That savings represents about 6 percent of annual expenses. Cutting that much of Cisco's workforce could amount to 4,400 of the company's 73,400 employees.
The San Jose, Calif.-based company employs about 4,900 workers and contractors at its campus in Research Triangle Park. Cisco has not provided site-specific breakdowns, but a 6 percent cut at Cisco's RTP complex could mean nearly 300 jobs.
Employees who are eligible for buyouts received offers this week, and must decide by June 24. Their last day will be July 8.
"We know what we have to do," Chambers said. "We have a clear game plan. We had to make changes before and each time we have made these changes, we emerged even stronger."
Cisco last offered buyouts in 2009, when it eliminated thousands of jobs worldwide.
The computer networking giant in recent weeks announced that it is shutting down consumer product lines and offering voluntary buyouts to senior employees. Chambers also is restructuring management and may take other steps to improve Cisco's performance.
For the fiscal third quarter, which ended in April 30, Cisco reported earnings of 42 cents per share, above analysts' expectations. Sales rose nearly 5 percent to $10.9 billion, matching analyst expectations.
But for the fourth quarter, which covers May, June and July, Cisco expects earnings of 37 cents to 39 cents per share, while analysts were expecting 42 cents per share. It expects revenue to be unchanged from last year or up to 2 percent higher. Analysts were looking for a 7 percent increase.
Cisco shares, already down 31 percent in the past year, fell in after-hours trading. The stock closed Wednesday at $17.78.
The Associated Press contributed to this report.