Cisco Systems Inc announced it would be reducing its workforce by 5%. The move would affect 4,000 jobs. The world's largest network equipment manufacturer said decreasing the number of employees was done in a bid to reduce costs. Cisco also wanted to reassign other staff to high-growth areas like cloud computing and data centers.

Reuters reported that investors were closely monitoring the commentaries of Cisco Chief Executive John Chambers. The company's broad customer base made Cisco the benchmark of the technology industry's general health. In a conference call, Chambers said, "The environment in terms of our business is improving slightly but nowhere near the pace that we want." As a result, the CEO explained they had "to very quickly reallocate the resources."

Investors were initially encouraged that Cisco would be able to ride out the slow demand for tech infrastructure. For the past 12 months, the firm's shares had increased more than 50%. After giving its quarterly earnings report, however, Cisco's shares dropped more than 9% after hours, its biggest fall in more than a year.