Cisco cuts 4,000 jobs amid sales slowdown
CALIFORNIA, UNITED STATES — Multinational technology conglomerate Cisco Systems is set to lay off 4,000 employees, a 5% cut of its global workforce, as part of its restructuring plan to focus on priority areas.
The company is experiencing a sales slump, with customers postponing the implementation of products, which has led to a decrease in demand. Despite a healthy profit margin, with a net profit of $2.6 billion this quarter, Cisco’s revenue fell 6% year-over-year to $12.8 billion.
The firm also revised its fiscal 2024 revenue projections to between $51.5 billion and $52.5 billion, down from previous figures.
The restructuring is expected to cost Cisco around $800 million in severance and related expenses, with the bulk recognized in fiscal 2024. The layoffs will start in June and are expected to roll out until 2025.
Meanwhile, CEO Chuck Robbins emphasized the company’s focus on innovation and growth, particularly in artificial intelligence and cybersecurity, as critical for their customers’ evolving needs.
In its recent earnings report, Robbins stated that they are aligning their investments to “future growth opportunities.”
“Our innovation sits at the center of an increasingly connected ecosystem and will play a critical role as our customers adopt AI and secure their organizations,” he added.
Cisco is also bolstering its partnership with Nvidia, aiming to facilitate the development of AI infrastructure for other companies. This move includes the integration of Nvidia’s Ethernet solutions into Cisco’s offerings.
Nvidia CEO Jensen Huang said that the partnership would help make it easier for companies to build infrastructure for AI, which he called “the most powerful technology force of our lifetime.”
This layoff announcement comes on the heels of Cisco revealing a significant security vulnerability in several of its unified communication and contact center products. The flaw, tracked as CVE-2024-20253, carries a severity score of 9.9/10.
