Cisco profit falls 27%

Cisco is the latest to report on the effects of the recession, with its quarterly net income falling 27% as enterprises trimmed their spending.

With sales off 7.5% at $9.1 billion, it posted a net profit of $2.1 billion and earnings per share of $0.26, compared with $0.33 a year earlier.

CEO John Chambers said the company had no plans to cut staff, but warned that "layoffs could be necessary" if the economy continues to decline.

He said the company was restructuring its business in the face of the recession, which could result in the loss of 1,500 to 2,000 jobs.

"Being very transparent, our definition of a company-wide layoff, if we had to do one, probably would be to lay off at least 10% of our workforce. In very direct terms, we are not going to consider a layoff at this point in time.

He said if the company executed on its plans, "the odds are reasonable" that it would "be able to avoid large downsizing events".

Chambers said orders for new equipment had fallen in most of its large markets, but it had seen growth from "the mid teens to the high 20s" in Mexico, Germany and Australia.

He said the result showed financial strength during a period of economic challenge, and the company remained "comfortable with our long-term vision and strategy."

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