Cisco shares sink 5% after announcing cuts to 4,000 jobs
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The news: US tech conglomerate Cisco Systems said it will cut 4,000 jobs, after lowering its annual revenue target in its Q2 results, Reuters reported.
The numbers: Cisco will cut 5% of its 85,000-strong global workforce, representing more than 4,000 jobs, after CEO Charles Robbins admitted the company was experiencing "weak demand with our telco and cable service provider customers". The company will incur a pre-tax charge of USD800 million ($1.23 billion) relating to the layoffs, consisting of severance and other costs.
Cisco shares fell more than 5% in extended trading on the Nasdaq, as the California-based multinational cut its full-year revenue forecast to USD51.5 billion to USD52.5 billion, from USD53.8 billion to USD55 billion.
The context: Cisco's announcement follows widespread job cuts in the tech sector since the turn of the year, with Alphabet, Amazon and Microsoft among 144 tech companies laying off a combined 35,000 workers so far in 2024, according to Layoffs.fyi.
Cisco is increasingly focusing on artificial intelligence as a significant growth driver, including by entering into a partnership with Nvidia to develop a range of AI infrastructure solutions.
Robbins also provided an update on Cisco's USD28 billion acquisition of monitoring and security software maker Splunk, which is expected to be completed during the first calendar quarter or early in the second quarter.
The source: Reuters
