Cisco defends layoffs, sees weak southern Europe
Cisco expects no change short term in southern Europe, its CEO for Europe, the Middle East, Africa and Russia told CNBC on Thursday, a day after the group said it would cut 5 percent of its workforce.
Chris Dedicoat declined to comment on whether a substantial part of the cuts would come from the region, saying only that it was important for the group to be "agile and nimble."
He defended the job cuts, saying the company had to try to predict where the growth opportunities were and where workers were needed.
"We have to make sure we have the right people with the right skill sets in the right place," he said.
On Wednesday, Cisco reported fourth-quarter net income of $2.3 billion, up from $1.9 billion a year earlier. Despite the increase, the network equipment giant announced 4,000 job cuts Thursday.
The company said it will take a charge for the restructuring in its fiscal first quarter. Shares of the world's biggest network equipment maker fell 10 percent after-hours in the U.S.
Looking forward, it expected first-quarter revenue growth of 3 percent to 5 percent year over year.
"But in the long term, 5 to 7 percent revenue growth and 7 to 9 percent earnings growth are solid forecasts," Dedicoat told CNBC Europe's "Squawk Box."
Growth wasn't as strong as the company would like, he said, adding that it faces challenges in Japan and China.
Reflecting the recent slowdown in China's economy, Cisco reported a 6 percent drop in orders in China, and a 3 percent drop in orders in the Asia Pacific and Japan regions in its fourth quarter.
Dedicoat also pointed to "special circumstances" in China. In June, Chinese state media said Cisco posed a security threat and urged a shift toward domestic suppliers. Its business also took a hit when the U.S., citing security concerns, blocked wireless carriers from using Chinese-made equipment to build mobile networks.
"But if you look at our peer group, everyone has signaled some challenges in Asia-Pac," Dedicoat said.