Cisco Promises Jobs Push As Profits Rise

John Chambers, the CEO of Cisco Systems believes the economic recovery is gaining steam, prompting the networking giant to announce it will add 2,000 to 3,000 jobs over the next few quarters.

Chambers’ comments came 3 February during the conference call with analysts and journalists announcing the company’s solid fiscal 2010 second-quarter financial numbers.

He said Cisco expects increased expenses as it looks to move deeper into more than 30 new “adjacencies” and take advantage of the growth in the market.

Cisco had 63,756 employees in the first fiscal quarter of 2010, though added some more in the second quarter through the acquisitions of Starent Networks and ScanSafe.

Throughout the call, Chambers was both optimistic and cautious. He called the second quarter a “tipping point” and an indication that the economic recovery had entered its second phase.

At the same time, he cautioned that there are no guarantees as the United States and other countries work to crawl out from the wreckage of the global recession.

“While we believe the recovery is growing, no one is sure how long it will last, how strong it will be or the extent of job growth,” Chambers said.

Still, Cisco is moving forward on the assumption that the recovery will continue, and will adapt if it slows, he said.

For the quarter, Cisco reported net sales of $9.8 billion (£6.1 billion) – an 8 percent increase over the same period in 2009 – and net income of $1.9 billion (£1.2 billion), a 23.2 percent jump.

The company’s projections for the current quarter are similarly optimistic. Chambers said the company expects revenues to grow between 23 and 26 percent in the second quarter.

Answering a question, Chambers said his optimism about the economic recovery is based not only on Cisco’s own businesses, but also on what world economic leaders have told him about what they’re seeing in their countries.

Regarding Cisco, he said the company is seeing growth in all its businesses and across all its regions.

For example, revenue for the ASR 1000 core router was up 150 percent over the same period last year, and orders for the newer ASR 9000 produced twice the revenue, he said. In addition, sales of the Flip video camera, acquired through the 2009 purchase of Pure Digital, was $130 million (£81 million), up from $50 million (£31 million) during the same period last year.

Chambers also said interest was growing in Cisco’s UCS (Unified Computing System), with more than 400 customers putting in orders.

What Cisco is able to do now is show customers how the various new markets and new products are beginning to fit together, he said. Not only is Cisco keeping its market share in such traditional businesses as enterprise networking, but also in other spaces, such as the edge of the network, video, cloud computing, Internet security and wireless.

“You are seeing an architectural play,” he said.