In its second round of layoffs this year, Cisco Systems plans to let go of 7% of its workforce as it concentrates on faster-growing digital sectors like cybersecurity and artificial intelligence.
The San Jose, California-based corporation did not disclose how many jobs it is eliminating. In July 2023, it employed 84,900 people. That statistic would indicate that 5,900 jobs would be lost. Cisco declared in February that it will lay off roughly 4,000 employees.
In order to produce dependable AI products, the networking equipment manufacturer said in June that it would invest $1 billion in tech firms like Cohere, Mistral, and Scale. It has just declared a collaboration with Nvidia to build AI system infrastructure.
Cisco’s layoffs occur barely two weeks after chipmaker Intel Corp. declared it will slash roughly 15,000 jobs in an effort to restructure its company and take on more formidable competitors like Nvidia and AMD. Investors were disappointed by Intel’s quarterly earnings report, and the company’s shares fell after the news. Cisco’s stock, on the other hand, increased by roughly 6% on Wednesday after hours.
Cisco began offering a cybersecurity readiness index in March as part of an effort to help companies assess their defenses against intrusions.
Revenue decreased by 10% from $15.2 billion to $13.64 billion.
A FactSet survey indicated that analysts were anticipating adjusted profits per share of 85 cents on $13.54 billion in revenue.
Cisco expects adjusted earnings per share for the current quarter of 86 cents to 88 cents on revenue of $13.65 billion to $13.85 billion. On $13.74 billion in revenue, analysts anticipate profits per share of 85 cents.
Cisco’s demand is beginning to pick up again, according to Edward Jones analyst David Heger. He pointed out that even without the products from its recent acquisition of Splunk, a cybersecurity company, product orders were up 6%.
He added that “the restructuring will help offset the earnings impact from interest expenses associated with financing the Splunk acquisition and will rationalize combined workforces.”
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