Cisco Reports Recovery In Equipment Demand, Implements 7% Global Job Cuts
The decision followed an earlier cut of 5 per cent of workforce or more than 4,000 jobs earlier this year
Cisco on Wednesday said it was cutting 7 per cent of its workforce as part of a major restructuring plan. This will reportedly realign the company’s focus toward high-growth sectors such as artificial intelligence (AI) and cybersecurity.
The decision followed a cut of 5 per cent of workforce or more than 4,000 jobs earlier this year.
Cisco is looking to mitigate the impact of supply chain disruptions and a deceleration in demand for its traditional networking equipment, which has been a key part of its business.
In conjunction with the layoffs, Cisco revealed that it expects to recognise pre-tax charges of up to USD 1 billion related to this restructuring. Of this amount, USD 700 million to USD 800 million is anticipated to be recorded in the first quarter. Despite these financial adjustments, Cisco’s outlook remains robust, with a forecasted first-quarter revenue between USD 13.65 billion and USD 13.85 billion. This forecasted range exceeds the average analyst expectation of USD 13.71 billion.
The company’s strategic shift is noted by its recent USD 28 billion acquisition of cybersecurity firm Splunk, its largest-ever deal. Additionally, Cisco has launched a USD 1 billion fund to invest in AI startups, including Cohere, Mistral AI and Scale AI.
For the fourth quarter, Cisco reported revenue of USD 13.64 billion and an adjusted profit per share of 87 cents, both figures surpassing analysts’ estimates. Following the announcement, Cisco’s shares rose by 5 per cent in extended trading.
(Inputs from Reuters)
