Cisco Will Cut 6,500 Workers, Record $1.3 Billion in Costs

Cisco Systems, the largest networking-equipment maker, plans to eliminate about 6,500 jobs, or 9 percent of its full-time workforce, to help trim $1 billion in annual costs and step up profit growth.

The cuts include 2,100 employees who took a voluntary early-retirement program. As part of the move, the company expects to book pretax expenses of $1.3 billion over several quarters, with $750 million in the fiscal fourth quarter. Cisco also said it will sell a set-top box manufacturing plant in Juarez, Mexico, to Foxconn Technology Group, transferring 5,000 workers. Cisco Chief Executive Officer John Chambers has been eliminating jobs and abandoning less-profitable businesses amid slowing sales gains. Cisco has lost market share in its main switching and routing units to Juniper Networks Inc. and Hewlett-Packard Co., and its forays into consumer products, such as the Flip video camera, faltered.