Cisco Announces Workforce Reduction Amid Quarterly Revenue Decline

Cisco, the prominent US technology company, announced on Wednesday its intention to reduce its workforce by 5%, equating to approximately 4,000 employees, following the release of its latest quarterly results. The company reported a 5% decrease in profits to $2.634 billion and a 6% decline in revenue to $12.791 billion for the second quarter of its fiscal year. Cisco cited a need for restructuring to realign the organization and allocate resources to priority areas, though specifics were not provided.

The majority of the layoffs are expected to take place in the current quarter, incurring an estimated cost of $800 million in severance pay and other expenses. Despite a 15% increase in cumulative profits to $6.272 billion for the half-year period, revenue saw only a slight uptick of less than 1% to $27.459 billion. However, analysts expressed concern over Cisco’s forecasts for the current quarter, which fell below expectations. CEO Chuck Robbins, initially optimistic about the quarter’s performance, adopted a more cautious stance during discussions with analysts.