Cisco to cull jobs as part of restructure

Cisco announced plans to cut thousands of employees as part of a restructure to shift its focus towards high-growth areas including AI and software.

The vendor stated it planned to cull about 5 per cent of its global workforce as part of the plan.

It had around 84,900 employees in 2023, which means it could be laying off more than 4,000.

Cisco will incur expenses of about $500 million due to the restructuring measures.

It expects to implement most of the job reductions in its current fiscal quarter, which runs to late April.

The vendor culled 4,000 jobs in November 2023 as part of a $600 million restructuring plan.

On a call to discuss fiscal Q2 2024 earnings (the period to 27 January), CEO Chuck Robbins said customers are still “digesting” equipment acquired previously, while also noting a slowdown in spending by fixed and mobile operators which it expects to last into the next fiscal year.

Robbins said cloud providers are working their way through more than 20 weeks of excess inventory.

“In terms of the macro environment, we are seeing a greater degree of caution and scrutiny of deals given the high level of uncertainty,” Robbins stated. “As we’re hearing this from our customers, it’s leading us to be more cautious with our forecast and expectations.”

Net income of $2.6 billion was down 5 per cent year-on-year with revenue falling 6 per cent to $12.7 billion: the comparable period in fiscal 2023 ran until 28 January.

Software revenue was flat at $4.2 billion.

Subscription sales increased 6 per cent to $6.4 billion, accounting for 50 per cent of total revenue,

Revenue from networking products fell 12 per cent to $7 billion.

Security revenue grew 3 per cent to $973 million.

Cisco projected fiscal Q3 revenue of $12.1 billion to $12.3 billion.