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Cisco to take $700 million in restructuring charges in 2015

(Reuters) – Network equipment maker Cisco Systems Inc <CSCO.O> said it would take restructuring charges of $700 million in cash in the year ending July 2015 related to its plan to cut 6,000 jobs.

Cisco shares were down 1.5 percent at $24.82 in premarket trading on the Nasdaq.

The latest round of layoffs is at least the third workforce reduction in about as many years for a company once synonymous with the Internet boom. The company has failed to sustain growth in its high-end switches and routers business.

Cisco will recognize $250 million to $350 million of the charges in the first quarter, the company said in a regulatory filing.

Chief Executive John Chambers on Wednesday blamed uncertainty in global demand for the job cuts.

Cisco is also battling sluggish sales and increased competition in emerging markets. The company’s rivals include Juniper Networks Inc <JNPR.N> and China’s Huawei Technologies Co Ltd [HWT.UL].

Cisco said on Wednesday that sales fell 23 percent in China and 13 percent in Brazil in the fourth quarter ended July 26.

The company also reported flat profit for the fourth quarter and forecast tepid first-quarter profit and revenue.

(Reporting by Soham Chatterjee in Bangalore; Editing by Simon Jennings)

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