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Cisco: No light at end of tunnel yet

The networking giant gives new details on the steps it is taking to cut costs, telling federal regulators in a quarterly filing that its hard times will continue.

Networking giant Cisco Systems gave new details Friday on the steps it is taking to cut costs, telling federal regulators in a quarterly filing that its hard times will continue "for the foreseeable future."

The company, which produces much of the infrastructure that telecommunications carriers use to build data and voice networks, is viewed as a bellwether for the technology sector. Once thought to be almost invulnerable to market downturns, it has struggled with an inventory glut and a sharp drop-off in demand for its products in recent months.

In its quarterly financial statement filed Friday, the company provided new information on parts of its business that it was leaving or restructuring to focus on more profitable areas.

More than a third of a $289 million write-off is due to a former acquisition, Monterey Networks, which Cisco bought for $500 million in 1999. Cisco said in April that it would discontinue one of the optical networking product lines from this company.

Most of the rest of the charge from discontinued products came from HyNex, another networking product line, and Clarity Wireless, which produced high-speed Internet connection equipment for customer homes.

A much larger charge, totaling $2.25 billion, resulted from a backlog of inventory largely from canceled orders and unanticipated slowdown in demand. Cisco previously said it did not expect to sell this inventory over the next 12 months.