Cisco Announces Job Cuts Amid Equipment Demand Recovery
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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
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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
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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
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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
[5]
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
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Cisco Systems plans to cut 7% of its global workforce while forecasting better-than-expected quarterly revenue. The company sees signs of recovery in equipment demand despite ongoing economic challenges.
Cisco Announces Significant Workforce Reduction
Cisco Systems, the networking equipment giant, has revealed plans to cut approximately 7% of its global workforce, affecting around 4,250 employees
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. This move comes as part of a restructuring effort aimed at reducing structural costs and aligning the company's resources with its strategic priorities2
.Positive Financial Outlook
Despite the job cuts, Cisco has forecasted better-than-expected quarterly revenue for the current quarter. The company projects revenue between $12.6 billion and $12.8 billion, surpassing analysts' estimates of $12.63 billion
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. This optimistic outlook suggests that Cisco is positioning itself for future growth and efficiency.Signs of Recovery in Equipment Demand
Cisco's CEO, Chuck Robbins, has noted early signs of stabilization in order patterns, particularly in the Americas region
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. This observation indicates a potential recovery in equipment demand, which is crucial for the company's core networking business.Impact of Economic Challenges
The tech industry has faced significant headwinds due to high interest rates and inflation, leading to reduced spending by businesses and consumers. Cisco, like many of its peers, has experienced a slowdown in demand for its networking equipment, software, and services
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.Strategic Shift and Future Focus
As part of its restructuring, Cisco plans to incur pretax charges of about $800 million, primarily for severance and other termination benefits. The company aims to complete the majority of these actions by the end of the second quarter of fiscal 2024
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.Related Stories
Market Response
Following the announcement, Cisco's shares saw a modest increase of about 1% in extended trading. This suggests that investors are cautiously optimistic about the company's strategic decisions and future prospects
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.Industry Context
Cisco's announcement follows similar moves by other tech giants, including Meta Platforms and Amazon, who have also implemented significant job cuts in response to economic pressures and changing market dynamics
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. This trend highlights the ongoing challenges and adjustments within the tech sector as companies navigate uncertain economic conditions.References
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