Thursday, April 28, 2011

Cisco Restructuring

There was an article in the Wall Street Journal recently about Cisco offering early retirement plans to their current employees. This is one of the many measures they are employing to reduce costs. Cisco recently cut the Flip video segment which resulted in a $300 Million loss. CEO John Chambers is starting to realize that Cisco needs to get back to the basics of the company, routers and switches. This is a good time for Cisco to trim down because the cloud market is really starting to take shape. Cisco is at the forefront of this market and cutting certain segments will help eliminate distractions.

The stock has performed lower than expected. Largely due to the recent unstable economic conditions. The events of Libya took a toll on the share price. The announcement of the dividend gave the stock a little boost and the companies recent actions are starting to capture some believers. Third quarter earnings will be released May 11, 2011.


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