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Job Crisis: Cisco Systems to Lay Off 7% of Workforce


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On Wednesday, Cisco Systems unveiled plans to lay off approximately 7% of its global workforce. This decision aligns with the company’s strategy to concentrate on high-growth sectors such as artificial intelligence and cybersecurity. This round of layoffs represents Cisco’s second significant job cut in 2024.

Impact on Employees

Although Cisco has not specified the exact number of positions affected, a 7% reduction is anticipated to impact around 6,000 employees, based on the company’s reported workforce of 84,900 as of July 2023. This follows an earlier round of layoffs in February, where 4,000 positions were cut.

Financial Performance

Cisco’s announcement comes in the wake of a 10% year-over-year decline in quarterly revenue, which totaled $13.64 billion. Despite this drop, the revenue exceeded market expectations of $13.54 billion.

Restructuring Plan

In an SEC filing, Cisco explained that the restructuring plan is designed to enable investment in key growth opportunities and enhance business efficiencies. The company anticipates recognizing pre-tax charges of up to $1 billion related to the restructuring, with $700-800 million expected to be recognized in the first quarter of fiscal 2025.

Future Outlook

Despite the job cuts, Cisco CEO Chuck Robbins remains optimistic about the future demand for the company’s networking equipment. Robbins noted that inventory digestion is complete and the company is moving towards a more normalized demand environment.

Strategic Investments

Cisco is shifting its focus towards emerging technologies. In June, the company committed $1 billion to invest in AI startups and recently acquired cybersecurity firm Splunk for $28 billion. Additionally, Cisco plans to restructure its departments by merging its networking, security, and collaboration divisions into a single organization.

Revenue Forecast

Looking ahead, Cisco projects first-quarter revenue to be between $13.65 billion and $13.85 billion, surpassing analyst projections.

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