The only way Cisco can keep its head above water is if it chops as many as 5,000 from its work force, according to Gleacher & Co’s Brian Marshall’s recommendation.
Talking to Barrons, he says it’d effectively work like the huge 2001 job cut which turned things around a little.
With the cuts, Cisco would be able to cut $1 billion from those pesky pay cheques it turns out you need to give staff.
Although Marshall claims not to have a source to Barrons, he does believe that if Cisco is going to grow it is going to need a ruthless culling or two. The head count is simply too high, according to Marshall.
Cisco is still riding the wave of a spending spree over the last two financial years, increasing the company pay roll by a modest 10,000, but not managing to increase revenue to boot. With the alleged helping hand it is giving to Chinese people-monitoring experiments, we can’t imagine such a job cut would make it very popular with its critics.
Earlier this year our own Ed Berridge reported that Cisco’s financial earnings did beat analyst predictions. But, in his own words, Berridge says “it’s not out of the woods yet.”