Cisco Announces Major Restructuring: 7% Workforce Cut Amid Shift to AI and Security

Cisco announces new restructuring plan, to cut 7% of workforce

Cisco Systems announced a restructuring plan on Wednesday saying it would cut 7% of its global workforce, while also lowering its annual revenue target. The California-based company plans to invest in key growth opportunities and drive more efficiencies. It 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 charges being recognized in the first quarter. This is the second round of layoffs likely to affect 6, 000 employees. Earlier in February, the company said it would layoff 5% of its workforce amounting to more than 4,000 jobs. Tech layoffs continue after 'Year of Efficiency' 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. (For top technology news of the day, subscribe to our tech newsletter Today's Cache) The company bought cybersecurity firm Splunk last year for $28 billion in its biggest purchase ever while also launching a $1-billion fund in June to invest in AI startups such as Cohere, Mistral AI and Scale AI as it moves to capitalise on the AI boom Cisco reported revenue of $13.64 billion for the fourth quarter ended July 27, compared with an estimate of $13.54 billion. The company's sales have fallen for a third consecutive quarter with its core networking business, including switches and routers trending downward as businesses started shifting to the cloud. Cisco had 84,900 employees at the end of 2023, before the job cuts. Read Comments

Cisco reveals plan to cut thousands of jobs as it beats earnings forecast

Cisco reveals plan to cut thousands of jobs as it beats earnings forecast Shares of Cisco Systems Inc. rose in extended trading today after the networking company said it's cutting 7% of its global workforce and reported quarterly financial results that topped analysts' estimates. The layoffs, which are the company's second round of job cuts this year, are part of a restructuring plan that will result in about $1 billion of pretax charges. The plan will enable the company to double down on what it believes are key growth opportunities in areas such as cybersecurity and artificial intelligence, officials said. According to Cisco, $700 million to $800 million of those charges will be recognized in the current quarter, with the rest set to be spread across its fiscal 2025 year. Cisco had already announced one major round of layoffs back in February, when it said it was eliminating about 4,000 jobs, or 5% of its workforce. This second round of job cuts will be even more significant. Cisco, which is based on San Jose, California, did not specify the exact number of positions that will be axed, but it had 84,900 employees as of July 2023, so based on that figure, it's likely that about 5,900 jobs will be lost. Cisco, once the world's most valuable publicly traded company, has been struggling recently, with revenue falling for a third successive quarter. Its core networking hardware business, which includes Ethernet switches for data centers and routers for offices and homes, has endured a long period of decline as large enterprise customers increasingly run their most important computing workloads and applications in the cloud. The company has pivoted by moving into networking and security software in order to diversify its revenue stream and bring in more recurring sales. In its fiscal fourth-quarter results, the company delivered earnings before certain costs such as stock compensation of 87 cents per share, coming in just above Wall Street's target of 85 cents. Revenue fell 10% from a year earlier, to $13.64 billion, beating the consensus estimate of $13.54 billion. Net income plunged 45%, to $2.2 billion. For the full year, revenue fell 6% to $53.8 billion, representing the first annual decline since 2020. Cisco expects its revenue decline to continue into the coming quarter. For the first quarter of fiscal 2025, the company is looking for sales of between $13.65 billion and $13.85 billion, compared with $14.7 billion one year earlier. The forecast is a tad better than expected, though, as Wall Street is modeling first-quarter sales of $13.74 billion. In terms of earnings, Cisco is modeling a profit of 86 to 88 cents per share, versus the consensus estimate of 85 cents. Cisco's traditional networking business is the main reason for its decline. Revenue there fell by 28% from a year earlier, to just $6.8 billion, the company said. On the other hand, Cisco's efforts in security and collaboration are doing a bit better. The company reported security revenue of $1.8 billion in the quarter, up 81% from a year earlier, thanks largely to its acquisition of Splunk Inc., which contributed around $960 million in sales. Meanwhile, collaboration revenue, which is primarily derived from the Webex service, was flat at just over $1 billion. "We delivered a strong close to fiscal 2024," said Cisco Chair and Chief Executive Chuck Robbins (pictured). "In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organizations in the era of AI." In June, Cisco revealed it's planning to invest more than $1 billion in AI startups such as Cohere Inc., Mistral and Scale AI Inc. in order to help it develop reliable AI products. In line with that initiative, Cisco recently announced a partnership with Nvidia Corp. to build networking infrastructure for AI systems. Investors reacted positively to news of the layoffs and the upbeat financial report, with Cisco's stock gaining more than 5% after hours. Prior to the report, the company's stock was down 10% in the year to date, compared with a 14% gain in the broader Nasdaq index. Cisco isn't the only struggling technology giant to announce a major restructuring initiative. Last week, the iconic chipmaker Intel Corp. said it is planning to cut around 15,000 jobs to try to turn its business around and better compete in the AI chip business, where it trails rivals such as Nvidia and Advanced Micro Devices Inc. On Monday, Dell Technologies Inc. disclosed plans to restructure its sales and marketing groups, though it didn't announce the number of layoffs, believed to be in the thousands.

Cisco cutting 7% of workforce as it shifts focus to AI, cybersecurity

Cisco Systems is planning to lay off 7% of its employees, its second round of job cuts this year, as the company shifts its focus to more rapidly growing areas in technology, such as artificial intelligence and cybersecurity. The company based in San Jose, California, did not specify the number of jobs it is cutting. It had 84,900 employees as of July 2023. Based on that figure, the number of jobs cut would be about 5,900. In February, Cisco announced it would cut about 4,000 jobs. The networking equipment maker said in June that it would invest $1 billion in tech startups like Cohere, Mistral and Scale to develop reliable AI products. It recently also announced a partnership with Nvidia to develop infrastructure for AI systems. Cisco's layoffs come just two weeks after chipmaker Intel Corp. announced it would cut about 15,000 jobs as it tries to turn its business around to compete with more successful rivals like Nvidia and AMD. Intel's quarterly earnings report disappointed investors and its stock took a nosedive following the announcement. In contrast, Cisco's shares were up about 6% after-hours on Wednesday. In a foray into cybersecurity, Cisco launched a cybersecurity readiness index back in March to help businesses measure their resiliency against attacks. Cisco Systems Inc. said Wednesday it earned $2.16 billion, or 54 cents per share, in its fiscal fourth quarter that ended on July 27, down 45% from $3.96 billion, or 97 cents per share, in the same period a year ago. Excluding special items, its adjusted earnings were 87 cents per share in the latest quarter. Revenue fell 10% to $13.64 billion from $15.2 billion. Analysts, on average, were expecting adjusted earnings of 85 cents per share on revenue of $13.54 billion, according to a poll by FactSet.

Cisco reveals plan to cut thousands of jobs as it beats expectations in its latest financial results - SiliconANGLE

Cisco reveals plan to cut thousands of jobs as it beats expectations in its latest financial results Shares of Cisco Systems Inc. were moving higher in extended trading today after the networking company said it's cutting 7% of its global workforce and reported quarterly financial results that topped analysts' estimates. The layoffs, which are the company's second round of job cuts this year, are said to be part of a restructuring plan that will result in around $1 billion of pretax charges. The plan will enable the company to double down on what it believes are key growth opportunities in areas such as cybersecurity and artificial intelligence, officials said. According to Cisco, $700 million to $800 million of those charges will be recognized in the current quarter, with the rest set to be spread across its fiscal 2025 year. Cisco had already announced one major round of layoffs back in February, when it said it was eliminating around 4,000 jobs, or approximately 5% of its workforce. This second round of job cuts will be even more significant. Cisco, which is based on San Jose, California, did not specify the exact number of positions that will be axed, but it had 84,900 employees as of July 2023, so based on that figure, it's likely that around 5,900 jobs will be lost. Cisco, once the world's most valuable publicly traded company, has been struggling recently, with revenue falling for a third successive quarter. Its core networking hardware business, which includes Ethernet switches for data centers and routers for offices and homes, has endured a long period of decline as large enterprise customers increasingly run their most important computing workloads and applications in the cloud. The company has pivoted by moving into networking and security software in order to diversify its revenue stream and bring in more recurring sales. In its fiscal fourth quarter results, the company delivered earnings before certain costs such as stock compensation of 87 cents per share, coming in just above Wall Street's target of 85 cents. Revenue fell 10% from a year earlier to $13.64 billion, beating the consensus estimate of $13.54 billion. Net income was down 45% to $2.2 billion. For the full year, revenue was down 6% to $53.8 billion, representing the first decline since 2020. Cisco expects its revenue decline to continue into the coming quarter. For the first quarter of fiscal 2025, the company is looking for sales of between $13.65 billion and $13.85 billion, compared to $14.7 billion one year earlier. The forecast is a tad better than expected though, as Wall Street is modeling first quarter sales of $13.74 billion. In terms of earnings, Cisco is modeling a profit of 86 cents to 88 cents per share, versus the consensus estimate of 85 cents. Cisco's traditional networking business is the main reason for its decline. Revenue there fell by 28% from a year earlier to just $6.8 billion, the company said. On the other hand, Cisco's efforts in security and collaboration are doing a bit better. The company reported security revenue of $1.8 billion in the quarter, up 81% from a year earlier, thanks partly to its acquisition of Splunk Inc., which contributed around $960 million in sales. Meanwhile, collaboration revenue, which is primarily derived from the Webex service, was flat at just over $1 billion. "We delivered a strong close to fiscal 2024," said Cisco Chair and Chief Executive Chuck Robbins (pictured). "In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organizations in the era of AI." In June, Cisco revealed it's planning to invest more than $1 billion in AI startups such as Cohere Inc., Mistral and Scale AI Inc. in order to help it develop reliable AI products. In line with that initiative, Cisco recently announced a partnership with Nvidia Corp. to build networking infrastructure for AI systems. Investors reacted positively to news of the layoffs and the upbeat financial report, with Cisco's stock gaining more than 5% after hours. Prior to the report, the company's stock was down 10% in the year to date, compared to a 14% gain in the broader Nasdaq index. Cisco isn't the only struggling technology giant to announce a major restructuring initiative. Last week, the iconic chipmaker Intel Corp. said it is planning to cut around 15,000 jobs in order to try and turn its business around and better compete in the AI chip business, where it trails rivals such as Nvidia and Advanced Micro Devices Inc. On Monday, Dell Technologies Inc. disclosed plans to restructure its sales and marketing groups, though it didn't announce any significant layoffs.

Cisco Systems to Cut About 7% of Staff in Second Round of Layoffs

Cisco Systems, one of the largest makers of computer networking equipment, said on Wednesday that it would cut 7 percent of its work force in its second major round of layoffs this year. The company did not say how many workers would be affected, but it reported it had 84,900 employees in July 2023, which would amount to around 6,000 jobs cut. In February, Cisco laid off 4,000 employees. In an earnings report, Cisco posted net income of $2.16 billion in its most recent quarter, down 45 percent from a year ago, and revenue of $13.64 billion, down 10 percent. Still, the company exceeded Wall Street expectations, and its stock was up nearly 6 percent in after-hours trading. Like other big tech companies, Cisco has raced to take advantage of an industrywide shift into artificial intelligence. While Cisco has long been one of Silicon Valley's largest companies, and briefly the world's most valuable publicly traded company during the dot-com boom, it has been overshadowed in recent years by companies offering cloud computing services to big corporate customers. Still, the company, which is based in San Jose, Calif., has managed to be very profitable through the years. In March, it closed its deal to acquire the cybersecurity and analytic company Splunk for $28 billion. In a statement on Wednesday, Chuck Robbins, Cisco's chairman and chief executive, said the company plans to further integrate Splunk into its products. It will also combine its networking, security and collaboration departments into one organization led by Jeetu Patel, Mr. Robbins said. Jonathan Davidson, Cisco Networking's general manager and executive vice president, will become an adviser to Mr. Robbins.

Cisco cuts thousands of jobs, 7% of workforce, as it shifts focus to AI, cybersecurity

SAN JOSE, Calif. (AP) -- Cisco Systems is planning to lay off 7% of its employees, its second round of job cuts this year, as the company shifts its focus to more rapidly growing areas in technology, such as artificial intelligence and cybersecurity. The company based in San Jose, California, did not specify the number of jobs it is cutting. It had 84,900 employees as of July 2023. Based on that figure, the number of jobs cut would be about 5,900. In February, Cisco announced it would cut about 4,000 jobs. The networking equipment maker said in June that it would invest $1 billion in tech startups like Cohere, Mistral and Scale to develop reliable AI products. It recently also announced a partnership with Nvidia to develop infrastructure for AI systems. Cisco's layoffs come just two weeks after chipmaker Intel Corp. announced it would cut about 15,000 jobs as it tries to turn its business around to compete with more successful rivals like Nvidia and AMD. Intel's quarterly earnings report disappointed investors and its stock took a nosedive following the announcement. In contrast, Cisco's shares were up about 6% after-hours on Wednesday. In a foray into cybersecurity, Cisco launched a cybersecurity readiness index back in March to help businesses measure their resiliency against attacks. Cisco Systems Inc. said Wednesday it earned $2.16 billion, or 54 cents per share, in its fiscal fourth quarter that ended on July 27, down 45% from $3.96 billion, or 97 cents per share, in the same period a year ago. Excluding special items, its adjusted earnings were 87 cents per share in the latest quarter. Revenue fell 10% to $13.64 billion from $15.2 billion. Analysts, on average, were expecting adjusted earnings of 85 cents per share on revenue of $13.54 billion, according to a poll by FactSet.

Cisco slashes seven percent of workforce

Networking titan Cisco has confirmed in a filing with the Securities Exchange Commission (SEC) that it is eliminating 7 percent of its global workforce as it embarks upon a restructuring plan. Switchzilla currently employs almost 85,000 people - meaning around 6,000 employees are about to get bad news. "Cisco currently estimates that it will recognize pre-tax charges to its GAAP financial results of up to $1 billion consisting of severance and other one-time termination benefits, and other costs," the business said. It expects to recognize $700 million to $800 million of those charges in Q1 2025, with the rest playing out during the fiscal year. Talk of the layoffs circulated earlier this week, and will represent the second major round this year. In February, Cisco cut around 4,000 jobs. The redundancies follow declining revenues and shrinking profits. Cisco's core networking business - switches and routers - has been on a downward trend as large enterprises have shifted toward the cloud. It has bolstered the software and securities operations via acquisition. Cisco is hoping to diversify and reposition itself for subscription revenue. On Wednesday, Cisco also released its Q4 2024 results [PDF]. Chief financial officer Richard Herren claimed in the earnings call that the layoff was "not about cost saving." "It's much more about finding efficiencies across the company so that we can pivot more resources, much like we did last year, into the fastest growth areas within the company. Which are pivoting more into AI, pivoting more into cloud, and pivoting more into cyber security," claimed Herren. CEO Chuck Robbins added that Cisco was making a "meaningful shift" that places "hundreds of millions of dollars" into AI related products - like networking for cloud, infrastructure, silicon and cyber. Some of this shifting around of dollars is visible in hindsight. The networking kraken spent $28 billion to acquire analytics firm Splunk in March and in February committed to a collab to develop AI-optimized networking kit with Nvidia. According to the results filing, total revenue for for FY 2024 was down 6 percent year-on-year to $53.8 billion. Networking revenue was down 15 percent to $29.2 billion, whereas security products were up 32 percent to $5.0 billion, observability up 27 percent to $837 million and collaboration up 2 percent to $4.1 billion. Services were up 5 percent to $14.5 billion. Net income for this period, which ended July 27, was down 18 percent to $10.3 billion. Despite the revenue drop, Robbins described Cisco as having "tremendous demand across the portfolio" and Herren celebrated the business achieving its highest operating margin in history - a non-GAAP 32.5 percent. The stock market also seemed to celebrate. Cisco shares were up around 6 percent in after hours trading. Cisco is one of several large tech players recently conducting layoffs. Intel announced it was eliminating 16,000 people - or 15 percent of its global workforce - to curb capital expenses. Dell also began cutting its workforce by an undisclosed number in order to shift to a strategy that will unlock "the value of modern IT and AI." ®

Cisco cuts thousands of jobs as it shifts focus to AI, cybersecurity

SAN JOSE, Calif. -- Cisco Systems is planning to lay off 7% of its employees, its second round of job cuts this year, as the company shifts its focus to more rapidly growing areas in technology, such as artificial intelligence and cybersecurity. The company based in San Jose, California, did not specify the number of jobs it is cutting. It had 84,900 employees as of July 2023. Based on that figure, the number of jobs cut would be about 5,900. In February, Cisco announced it would cut about 4,000 jobs. The networking equipment maker said in June that it would invest $1 billion in tech startups like Cohere, Mistral and Scale to develop reliable AI products. It recently also announced a partnership with Nvidia to develop infrastructure for AI systems. In a foray into cybersecurity, Cisco launched a cybersecurity readiness index back in March to help businesses measure their resiliency against attacks. Cisco said Wednesday it earned $2.16 billion, or 54 cents per share, in its fiscal fourth quarter that ended on July 27, down 45% from $3.96 billion, or 97 cents per share, in the same period a year ago. Excluding special items, its adjusted earnings were 87 cents per share in the latest quarter. Revenue fell 10% to $13.64 billion from $15.2 billion. Analysts, on average, were expecting adjusted earnings of 85 cents per share on revenue of $13.54 billion, according to a poll by FactSet. Shares of Cisco Systems Inc. climbed 6% in after-hours trading.

Cisco Cuts Thousands of Jobs, 7% of Workforce, as It Shifts Focus to AI, Cybersecurity

SAN JOSE, California (AP) -- Cisco Systems is planning to lay off 7% of its employees, its second round of job cuts this year as the company shifts its focus to more rapidly growing areas in technology, such as artificial intelligence and cybersecurity. The company based in San Jose, California, did not specify the number of jobs it is cutting. It had 84,900 employees as of July 2023. Based on that figure, the number of jobs cut would be about 5,900. In February, Cisco announced it would cut about 4,000 jobs. The networking equipment maker said in June that it would invest $1 billion in tech startups like Cohere, Mistral and Scale to develop reliable AI products. It recently also announced a partnership with Nvidia to develop infrastructure for AI systems. In a foray into cybersecurity, Cisco launched a cybersecurity readiness index back in March to help businesses measure their resiliency against attacks. Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Cisco earnings beat expectations as company announces 7% cut to workforce

Aug. 15 (UPI) -- Cisco Systems' earnings and revenue topped Wall Street estimates on Wednesday, despite a third straight quarter of losses and an announced 7% cut to its global workforce, as the tech company shifts focus to artificial intelligence. Cisco released its earnings after Wednesday's market close. For the period that ended July 27, earnings fell 24% to 87 cents and revenue fell 10% to $13.6 billion. The earnings mark Cisco's first full fiscal year drop since 2020. In extended trading Wednesday, Cisco shares were up more than 5% to $48.18 after the company outlined its restructuring plan in a filing that will "allow it to invest in key growth opportunities and drive more efficiencies in its business." At the end of fiscal 2023, Cisco had 84,900 employees. The 7% cut to its workforce is expected to result in up to $1 billion in pretax charges, according to the filing. It is the second round of layoffs this year as Cisco shifts its growth to cybersecurity and artificial intelligence. Approximately 4,000 employees were laid off in February, with early reports indicating a similar number of layoffs this month, as analysts blame market demand and supply chain issues in Cisco's main business of routers and switches. Despite the losses, Cisco has outperformed expectations since March when it closed on its massive $28 billion acquisition of software company Splunk, leading to increased subscription revenue. Cisco is one of a number of telecom and tech companies that is cutting costs to offset larger AI investments. Last month, Intuit announced it would cut 1,800 employees -- or 10% of its workforce -- to invest in tech workers who specialize in artificial intelligence.

Cisco cuts jobs, shifts focus to AI, cybersecurity

Cisco Systems is planning to lay off 7 per cent of its employees, its second round of job cuts this year, as the company shifts its focus to more rapidly growing areas in technology, such as artificial intelligence and cybersecurity. The company based in San Jose, California, did not specify the number of jobs it is cutting. It had 84,900 employees as of July 2023. Based on that figure, the number of jobs cut would be about 5,900. In February, Cisco announced it would cut about 4,000 jobs. The networking equipment maker said in June that it would invest USD1 billion in tech startups like Cohere, Mistral and Scale to develop reliable AI products. It recently also announced a partnership with Nvidia to develop infrastructure for AI systems. Cisco's layoffs come just two weeks after chipmaker Intel Corp announced it would cut about 15,000 jobs as it tries to turn its business around to compete with more successful rivals like Nvidia and AMD. Intel's quarterly earnings report disappointed investors and its stock took a nosedive following the announcement. In contrast, Cisco's shares were up about 6 per cent after-hours on Wednesday. In a foray into cybersecurity, Cisco launched a cybersecurity readiness index back in March to help businesses measure their resiliency against attacks. Cisco Systems Inc said Wednesday it earned USD2.16 billion, or 54 cents per share, in its fiscal fourth quarter that ended on July 27, down 45 per cent from USD3.96 billion, or 97 cents per share, in the same period a year ago. Excluding special items, its adjusted earnings were 87 cents per share in the latest quarter. Revenue fell 10 per cent to USD13.64 billion from USD15.2 billion. Analysts, on average, were expecting adjusted earnings of 85 cents per share on revenue of USD13.54 billion, according to a poll by FactSet. For the current quarter, Cisco is forecasting adjusted earnings of 86 cents to 88 cents per share on revenue of USD13.65 billion to USD13.85 billion. Analysts are expecting earnings of 85 cents per share on revenue of USD13.74 billion. Edward Jones analyst David Heger said Cisco is starting to see demand recover after it slowed over the past few quarters, noting that product orders were up 6 per cent even when excluding those from its recent acquisition of cybersecurity firm Splunk. He added that "the restructuring will help offset the earnings impact from interest expenses associated with financing the Splunk acquisition and will rationalise combined workforces."

Cisco to cut thousands of jobs as it focuses on AI and cybersecurity

Cisco did not specify the number of roles it will cut and it is unclear how many Irish jobs will be impacted as a result. Cisco is planning a second round of job cuts this year, as it aims to cut roughly 7pc of its global staff as it focuses on certain sectors such as cybersecurity and AI. The company did not specify how many jobs would be impacted but it is expected to be thousands worldwide - Cisco employed nearly 85,000 as of June 2023. The decision follows an earlier round of job cuts by Cisco in February as part of efforts to "realign the organisation. The announcement was made in an earnings call for Cisco's fourth fiscal quarter for 2024, where its revenue of $13.64bn was above estimates. In an earnings call, CEO Chuck Robbins said the company is "laser focused" on growth and is investing to "win in AI, cloud and cybersecurity". "we announced a restructuring plan to allow us to both invest in key growth opportunities as well as drive more efficiency in our business," Robbins said. The restructuring effort could impact Irish jobs - Cisco has offices in Dublin and Galway. When asked exactly how many employees will be impacted, Cisco CFO Scott Herren said it is not that simple and that it should be viewed as a "reallocation versus a headcount savings". "In some cases, the efficiencies that we're going to get will be by moving into lower cost locations," Herren said. Cisco has been expanding into certain sectors more aggressively, as it snapped up cybersecurity company Splunk in a deal valued at $28bn last year. The tech multinational also launched a €1bn fund this year to invest in AI start-ups globally and expand the development of secure, reliable AI. Job losses in the tech sector have been growing this year, as companies take cost-cutting measures in response to macroeconomic issues. Earlier this month, Intel shared a disappointing second quarter and looks set to cut more than 18,000 staff globally. It is unclear how many Irish jobs will be affected. Find out how emerging tech trends are transforming tomorrow with our new podcast, Future Human: The Series. Listen now on Spotify, on Apple or wherever you get your podcasts.