Cisco Announces Job Cuts Amid Equipment Demand Recovery

Cisco sees recovery in equipment demand, cuts 7% jobs globally

Aug 14 (Reuters) - Cisco Systems said on Wednesday it was witnessing rebounding demand for its networking equipment and announced a 7% cut in its global headcount to focus on high-growth areas such as AI and cybersecurity. Shares of the company were up 5% in extended trading after it forecast upbeat current-quarter revenue. "Inventory digestion is complete and we're now returning to a more normalized demand environment," CEO Chuck Robbins said on an analyst call. Cisco has been working to reduce its reliance on its massive networking equipment business, which has struggled due to supply-chain disruptions and a slowdown in post-pandemic demand. In February, it said it would cut 5% of its global workforce or more than 4,000 jobs. It announced the second round of layoffs on Wednesday, The San Jose, California-based company estimates it will recognize pre-tax charges of up to $1 billion in connection with the restructuring plan, with $700 million to $800 million of these being recognized in the first quarter. The layoffs allow Cisco to "maintain focus on growth areas such as software, services, AI and cybersecurity, while balancing its financial obligations and reducing the percentage of hardware in its product mix," according to Michael Ashley Schulman, chief investment officer at Running Point Capital. It expects first-quarter revenue in the range of $13.65 billion and $13.85 billion, the mid-point of which is higher than analysts' average expectation of $13.71 billion, according to LSEG data. To accelerate diversification and capitalize on the AI boom, Cisco agreed to buy cybersecurity firm Splunk last year for about $28 billion, its biggest-ever deal. It also launched a $1-billion fund in June to invest in AI startups such as Cohere, Mistral AI and Scale AI. Cisco reported revenue of $13.64 billion for the fourth quarter ended July 27, compared with an estimate of $13.54 billion. Its adjusted profit per share was 87 cents, compared with the estimate of 85 cents. (Reporting by Juby Babu in Mexico City and Jaspreet Singh in Bengaluru; Editing by Pooja Desai)

Cisco sees recovery in equipment demand, cuts 7% jobs globally

Cisco has been working to reduce its reliance on its massive networking equipment business, which has struggled due to supply-chain disruptions and a slowdown in post-pandemic demand. In February, it said it would cut 5% of its global workforce or more than 4,000 jobs.Cisco Systems said on Wednesday it was witnessing rebounding demand for its networking equipment and announced a 7% cut in its global headcount to focus on high-growth areas such as AI and cybersecurity. Shares of the company were up 5% in extended trading after it forecast upbeat current-quarter revenue. "Inventory digestion is complete and we're now returning to a more normalized demand environment," CEO Chuck Robbins said on an analyst call. Cisco has been working to reduce its reliance on its massive networking equipment business, which has struggled due to supply-chain disruptions and a slowdown in post-pandemic demand. In February, it said it would cut 5% of its global workforce or more than 4,000 jobs. It announced the second round of layoffs on Wednesday, confirming a Reuters report from last week. The San Jose, California-based company estimates it will recognize pre-tax charges of up to $1 billion in connection with the restructuring plan, with $700 million to $800 million of these being recognized in the first quarter. The layoffs allow Cisco to "maintain focus on growth areas such as software, services, AI and cybersecurity, while balancing its financial obligations and reducing the percentage of hardware in its product mix", according to Michael Ashley Schulman, chief investment officer at Running Point Capital. It expects first-quarter revenue in the range of $13.65 billion and $13.85 billion, the mid-point of which is higher than analysts' average expectation of $13.71 billion, according to LSEG data. To accelerate diversification and capitalize on the AI boom, Cisco agreed to buy cybersecurity firm Splunk last year for about $28 billion, its biggest-ever deal. It also launched a $1-billion fund in June to invest in AI startups such as Cohere, Mistral AI and Scale AI. Cisco reported revenue of $13.64 billion for the fourth quarter ended July 27, compared with an estimate of $13.54 billion. Its adjusted profit per share was 87 cents, compared with the estimate of 85 cents.

Cisco sees recovery in equipment demand, cuts 7% jobs globally

"Inventory digestion is complete and we're now returning to a more normalized demand environment," CEO Chuck Robbins said on an analyst call. Cisco has been working to reduce its reliance on its massive networking equipment business, which has struggled due to supply-chain disruptions and a slowdown in post-pandemic demand. In February, it said it would cut 5% of its global workforce or more than 4,000 jobs. It announced the second round of layoffs on Wednesday, confirming a Reuters report from last week. The San Jose, California-based company estimates it will recognize pre-tax charges of up to $1 billion in connection with the restructuring plan, with $700 million to $800 million of these being recognized in the first quarter. The layoffs allow Cisco to "maintain focus on growth areas such as software, services, AI and cybersecurity, while balancing its financial obligations and reducing the percentage of hardware in its product mix", according to Michael Ashley Schulman, chief investment officer at Running Point Capital. It expects first-quarter revenue in the range of $13.65 billion and $13.85 billion, the mid-point of which is higher than analysts' average expectation of $13.71 billion, according to LSEG data. To accelerate diversification and capitalize on the AI boom, Cisco agreed to buy cybersecurity firm Splunk last year for about $28 billion, its biggest-ever deal. It also launched a $1-billion fund in June to invest in AI startups such as Cohere, Mistral AI and Scale AI. Cisco reported revenue of $13.64 billion for the fourth quarter ended July 27, compared with an estimate of $13.54 billion. Its adjusted profit per share was 87 cents, compared with the estimate of 85 cents. (Reporting by Juby Babu in Mexico City and Jaspreet Singh in Bengaluru; Editing by Pooja Desai)

Cisco to cut 7% of jobs globally, forecasts better-than-expected quarterly revenue

Cisco said in February it would cut 5% of its global workforce, or more than 4,000 jobs, while lowering its annual revenue target. It expects first-quarter revenue in the range of $13.65 billion and $13.85 billion, the mid-point of which is higher than analysts' average expectation of $13.71 billion, according to LSEG data. Last week, Reuters exclusively reported that Cisco would cut thousands of jobs in a second round of layoffs this year. The company, the largest maker of routers and switches that direct internet traffic, has been grappling with sluggish demand and supply-chain constraints in its mainstay business. That pushed it to diversify with moves such as its $28-billion buyout of cybersecurity firm Splunk, which it completed in March. The acquisition is expected to reduce its reliance on one-time equipment sales by boosting its subscription business. "As we look to build on our performance, we remain laser focused on growth and consistent execution as we invest to win in AI, cloud and cybersecurity, while maintaining capital returns," CFO Scott Herren said in a statement. The company launched a $1-billion fund in June to make investments in AI startups such as Cohere, Mistral AI and Scale AI. Cisco said at the time it had made 20 AI-focused acquisitions and investments over the past few years. Cisco reported revenue of $13.64 billion for the fourth quarter ended July 27, compared with an estimate of $13.54 billion. Its adjusted profit per share was 87 cents, compared with an estimate of 85 cents. (Reporting by Juby Babu in Mexico City and Jaspreet Singh in Bengaluru; Editing by Pooja Desai)

Cisco to cut 7% of jobs globally, forecasts better-than-expected quarterly revenue

Cisco said in February it would cut 5% of its global workforce, or more than 4,000 jobs, while lowering its annual revenue target Cisco Systems forecast better-than-expected first-quarter revenue on Wednesday and said it was cutting 7% of its global workforce as it shifts focus to high-growth areas, sending its shares up 5% in extended trading. The San Jose, California-based company estimates it will recognize pre-tax charges of up to $1 billion in connection with the plan, with $700 million to $800 million of these being recognized in the first quarter. Cisco said in February it would cut 5% of its global workforce, or more than 4,000 jobs, while lowering its annual revenue target. It expects first-quarter revenue in the range of $13.65 billion and $13.85 billion, the mid-point of which is higher than analysts' average expectation of $13.71 billion, according to LSEG data. Last week, Reuters exclusively reported that Cisco would cut thousands of jobs in a second round of layoffs this year. The company, the largest maker of routers and switches that direct internet traffic, has been grappling with sluggish demand and supply-chain constraints in its mainstay business. That pushed it to diversify with moves such as its $28-billion buyout of cybersecurity firm Splunk, which it completed in March. The acquisition is expected to reduce its reliance on one-time equipment sales by boosting its subscription business. "As we look to build on our performance, we remain laser focused on growth and consistent execution as we invest to win in AI, cloud and cybersecurity, while maintaining capital returns," CFO Scott Herren said in a statement. The company launched a $1-billion fund in June to make investments in AI startups such as Cohere, Mistral AI and Scale AI. Cisco said at the time it had made 20 AI-focused acquisitions and investments over the past few years. Cisco reported revenue of $13.64 billion for the fourth quarter ended July 27, compared with an estimate of $13.54 billion. Its adjusted profit per share was 87 cents, compared with an estimate of 85 cents. (Reporting by Juby Babu in Mexico City and Jaspreet Singh in Bengaluru; Editing by Pooja Desai)