For the last several quarters, Cisco CEO John Chambers has been making quasi-positive noises about the potential for an eventual recovery. Also, the weakness was limited to the US and Europe. Not anymore.
Cisco’s new outlook calls for a revenue decline of 5%-10% next quarter. The Street was looking for +6%. October was apparently awful. Worldwide. The company will be cutting $1 billion of costs, which will obviously include firings.
It is increasingly clear that the global economy fell off a cliff at the end of September, around the time that the global credit markets ceased functioning. Based on the anecdotes we have heard in the past week, it has yet to recover. We can’t imagine it will anytime soon.
Hang on to your hats.
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