Recent market movements by networking heavyweights Lucent and Cisco indicate shaky ground in the networking arena. Meanwhile Intel may be shifting its focus from wired to wire-less, say analysts
Though many companies make use of the quarterly announcements period as an excuse to cut staffing - "trimming the fat", drastic changes seem to be an industry-wide trend in the networking arena.
Cisco's waning warning
The recent announcements of Cisco’s last quarter’s earnings and its failure to hit expectations, is only the latest in the series of events that seem to plague the IT networking industry. The eighth-largest US company by market value, Cisco declined US$4.69 to US$31.06, costing investors US$34 billion.
The company said revenue may fall as much as 5 percent this quarter from the last one. This might be an indication that the company may be hitting a ceiling in its growth.
Shortly after the report, US stocks declined, the Nasdaq composite falling 2.1% to 2607.91.
Lucent goes for a spin
Just a little before that, Lucent announced that they would be releasing over 10,000 personnel in order to remain 'viable'. The company was reported saying that it had plan to eventually shed some 32,000 staff worldwide.
In the midst of the downsizing, the company also plans to spin-off its optoelectronic and semiconductor operations in March. Agere Systems makes semiconductors and components that send and receive light waves carrying data and voice traffic over optical networks. The company is one of the core reasons some investors are still hanging on, say analysts, who believe that Lucent investors are anxious to see the company refocus and slim down as fast as possible.
In spite of the weak IPO market, especially in the tech sector, Agere hopes to be able to raise up to US$7.4 billion in its IPO, according to an SEC filing.