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.
In a foray into cybersecurity, Cisco launched a cybersecurity readiness index back in March to help businesses measure their resiliency against attacks.
For the current quarter, Cisco is forecasting adjusted earnings of 86 cents to 88 cents per share on revenue of $13.65 billion to $13.85 billion.
Analysts are expecting earnings of 85 cents per share on revenue of $13.74 billion.
In a move to concentrate on faster-growing tech sectors like artificial intelligence and cybersecurity, Cisco Systems plans to lay off 7% of its workforce in its second round of layoffs this year.
It is unclear how many jobs the San Jose, California-based company is eliminating. As of July 2023, there were 84,900 workers. That amount would translate into roughly 5,900 fewer jobs being cut. About 4,000 job cuts were announced by Cisco in February.
In order to develop dependable AI products, the networking equipment manufacturer announced in June that it would invest $1 billion in tech startups like Cohere, Mistral, and Scale. A collaboration with Nvidia to create AI system infrastructure was also recently announced.
Two weeks have passed since chipmaker Intel Corp. laid off employees at Cisco. declared that it would lay off 15,000 employees in an effort to rebuild its company and compete with more established rivals like AMD and Nvidia. Investors were disappointed by Intel’s quarterly earnings report, and the company’s stock plummeted after the release. On the other hand, Cisco’s stock increased by roughly 6% on Wednesday after market close.
To assist companies in gauging their defense against intrusions, Cisco introduced a cybersecurity readiness index back in March.
Cisco Group, Inc. claimed on Wednesday that it made $2.16 billion, or 54 cents per share, in its fiscal fourth quarter, which concluded on July 27. This is a 45 percent decrease from $3.96 billion, or 97 cents per share, in the same period last year. Its adjusted earnings for the most recent quarter, excluding special items, were 87 cents per share.
From $15.2 billion to $13.64 billion, revenue decreased by 10%.
According to a FactSet poll, analysts were averaging 85 cents per share on revenue of $13.54 billion for adjusted earnings.
With revenue between $13.65 billion and $13.85 billion, Cisco expects adjusted earnings per share for the current quarter of 86 cents to 88 cents. Analysts anticipate $13.74 billion in revenue and 85 cents per share in earnings.
The demand for Cisco products has been picking up again after slowing down over the last few quarters, according to Edward Jones analyst David Heger. He pointed out that even without the products from its recent acquisition of the cybersecurity company Splunk, orders for Cisco products were up 6%.
He went on to say, “The restructuring will rationalize combined workforces and help offset the earnings impact from interest expenses associated with financing the Splunk acquisition.”. “.
