Cisco says it’s cutting 5% of global workforce, amounting to over 4,000 jobs

Cisco
announced
plans
to
cut
5%
of
its
workforce
on
Wednesday,
a
decision
that
will
result
in
the
elimination
of
about
4,250
jobs.
Shares
of
Cisco
were
down
as
much
as
9%
in
extended
trading.

It’s
the
latest
tech
company
to
downsize
in
2024,
as
the
industry
continues
to

squeeze
out
costs
following
the
market
downturn
that
hit
two
years
ago.
January
was
the
busiest
month
for
job
cuts
in
the
industry
since
March,
as
Alphabet,
Amazon,
Microsoft
and
SAP
all
said
they
were
eliminating
positions,
as
did
eBay,
Unity
and
Discord.
So
far
this
year,
144
tech
companies
have
laid
off
almost
35,000
workers,
according
to
the
website
Layoffs.fyi.

In
addition
to
disclosing
the
job
cuts,
Cisco
reported
strong
fiscal
second-quarter
results
but
gave
a
light
forecast.
Here’s
how
it
did
in
comparison
with
the
consensus
from
LSEG,
formerly
known
as
Refinitiv:

• 
  Earnings
  per
  share:
  87
  cents,
  adjusted,
  vs.
  84
  cents
  expected
• 
  Revenue:
  $12.79
  billion,
  vs.
  $12.71
  billion
  expected

Cisco’s
revenue
declined
6%
year
over
year
during
the
quarter,
which
ended
on
Jan.
27,
according
to
a

statement.
Net
income
fell
to
$2.63
billion,
or
65
cents
per
share,
from
$2.77
billion,
or
67
cents
per
share,
in
the
year-ago
quarter.
The
company
has
yet
to
close
its

$28
billion
acquisition
of
monitoring
and
security
software
maker


Splunk.
Cisco
now
expects
to
complete
the
deal
late
in
the
first
calendar
quarter
or
early
in
the
second
quarter,
CEO
Chuck
Robbins
said
on
a
conference
call
with
analysts.

Revenue
from
networking
products
totaled
$7.08
billion,
slightly
below
the
$7.10
billion
consensus
among
analysts
surveyed
by
StreetAccount.

With
respect
to
guidance
for
the
fiscal
third
quarter,
Cisco
called
for
84
to
86
cents
in
adjusted
earnings
per
share
on
$12.1
billion
to
$12.3
billion.
Analysts
polled
by
LSEG
were
looking
for
adjusted
earnings
of
92
cents
per
share
on
$13.09
billion
in
revenue.

For
the
full
year,
Cisco
sees
$3.68
to
$3.74
in
adjusted
earnings
per
share
and
$51.5
billion
to
$52.5
billion
in
revenue.
Analysts
had
projected
$3.86
in
adjusted
earnings
per
share,
with
$54.26
billion
in
revenue.

The
guidance
excludes
an
impact
from
Splunk.

Robbins
flagged
challenges
weighing
on
the
guidance
during
the
call.

“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
said.
“As
we’re
hearing
this
from
our
customers,
it’s
leading
us
to
be
more
cautious
with
our
forecast
and
expectations.
Second,
as
we
discussed
last
quarter
and
subsequently
saw
in
other
technology
provider
results,
customers
have
been
taking
time
since
the
start
of
our
fiscal
2024
to
deploy
the
elevated
levels
of
products
shipped
to
them
in
recent
quarters,
and
this
is
taking
longer
than
our
initial
expectations.”

Demand
remains
sluggish
among
telecommunications
and
cable
service
provider
clients,
Robbins
said.

Cisco
said
it
was
increasing
its
dividend
by
a
penny
to
40
cents
per
share.

—
CNBC’s
Ari
Levy
contributed
to
this
report.

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