Cisco to chop 15 per cent of workforce

City A.M. Reporter
Cisco Systems plans to cut 15 per cent of its staff and sell a set-top box factory as part of a plan to cut annual expenses by $1bn (£622m) as the network equipment maker tries to revive its fortunes.

The company said on Monday that it will cut 11,500 jobs, compared with the several thousand that analysts had predicted. The cuts come after Cisco's chief executive John Chambers said in April that the company had "lost its way."

Cisco had 73,408 employees as of the end of the last quarter, a spokeswoman said. Cisco will transfer 5,000 to Taiwan's Hon Hai Precision Industry, which will buy the set-top box plant in Juarez, Mexico.

Of the other 6,500 who are leaving, 2,100 will take early retirement.

"This is a net positive for the company and for investors," said Morningstar analyst Grady Burkett.