Cisco, with around 85,000 employees last year, plans to cut about 4,000 jobs in a restructuring effort costing approximately $500 million.
Cisco Systems, the leading manufacturer of networking equipment, has announced plans to reduce its workforce by thousands due to a decline in corporate technology spending, which has negatively impacted its sales growth.
Cisco has disclosed that a restructuring plan will impact approximately 5% of its workforce, amounting to about 4,000 jobs, given its nearly 85,000 employees as of last year. The company anticipates the restructuring to incur costs of approximately $500 million.
Cisco’s announcement, coupled with a forecast significantly below Wall Street expectations, led to a sharp decline in Cisco shares during late trading. Chief Executive Officer Chuck Robbins informed analysts on a conference call that customers are concerned about the state of the economy, leading them to delay orders and reassess their equipment needs.
Cisco’s CEO Chuck Robbins noted that customers are delaying purchases and subjecting them to increased scrutiny, reflecting broader cautiousness in the current economic climate.
The decision by Cisco to cut jobs aligns with a trend seen across several major tech companies, with nearly 35,000 job cuts announced in 2024 alone, as reported by Layoffs.fyi, which tracks tech layoffs since the onset of the pandemic.
In response to the weak forecast, Cisco’s shares plummeted by as much as 6.7% during late trading. While the shares had remained relatively stable throughout 2024, closing at $50.28 in New York, the announcement of job cuts and the subdued forecast caused a significant market reaction.
Cisco forecasts sales of $12.1 billion to $12.3 billion for the fiscal third quarter, ending in April, significantly below the average analyst estimate of $13.1 billion. Excluding certain items, the company anticipates a profit of 84 to 86 cents per share, compared to a prediction of 92 cents per share.
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