Following news of huge job cuts at Intel Corp. and Cisco Systems Inc., the Nasdaq tumbled 115.95 points Friday to land at 2,052.78, its lowest close since December 1998.
A strong employment report, which could cause the Fed to lighten up on interest-rate cuts, also contributed to the decline.
Computer networking company Cisco reported late Friday it planned on cutting 3,000 to 5,000 permanent jobs through attrition and consolidation of positions. Also, the company said it may cut another 3,000 temporary employees. Cisco employs about 44,000.
John T. Chambers, the company’s president and chief executive officer, said the cuts were due to signs of more permanent worldwide economic slowdown.
“We’re taking these steps because of the continuing slowdown in the U.S. economy and initial signs of a slowdown expanding to other parts of the world,” he said. “We also now believe that this slowdown in capital spending could extend beyond two quarters.”
Cisco’s stock closed at $20.63, down 9.6 percent.
Cisco’s announcement comes a day after Intel Corp. said it would cut about 5,000 jobs, primarily through attrition, and announced an expected a 25-percent drop in first-quarter revenue compared with the fourth quarter.
Intel’s stock dropped almost 12 percent to close at $29.44.
