How Cisco isn’t having a good time
Cisco will cut over 4,000 jobs and lower its revenue forecasts for 2024. The company will try to relaunch itself thanks to cybersecurity and its partnership with Nvidia on artificial intelligence
Cisco Systems, an American telecommunications tools and software company, has announced that it will cut over four thousand jobs and has lowered its revenue target for the fiscal year 2024. The company is going through a complicated moment, but it is not l unique: in recent weeks other big names in the technology sector – such as Amazon and Google , but also eBay and Discord – have also laid off thousands of employees.
ALL CISCO CUTS
In addition to reducing its global workforce of 85,000 by 5 percent, Cisco downgraded its revenue forecast from $53.8-55 billion to $51.5-52.5 billion. CEO Charles Robbins also said he was “seeing weak demand from our customers who provide telecommunications and cable services.”
After the release of the data, the company's shares – listed on the New York Stock Exchange – lost up to 9 percent.
WEAK FORECAST FOR THE NEXT MONTHS
Cisco may face weak demand for its products for some time to come as telecom customers cut spending to prioritize clearing out inventory of networking equipment. Joe Brunetto, an analyst at Third Bridge, told Reuters that the situation for Cisco could improve in the second half of 2024 or early 2025.
For the third quarter of the year, Cisco expects revenue of between $12.1 and $12.3 billion, below the estimates reported by LSEG (13.1 billion).
THE RELAUNCH: CYBERSECURITY AND NVIDIA
It was already known, however, that the company was planning layoffs and restructuring to focus on specific high-growth sectors, such as cybersecurity and artificial intelligence: in the first case, Cisco acquired Splunk, a cybersecurity company, in September to approximately 28 billion dollars (the operation is not yet concluded); in the second case, however, it is collaborating with Nvidia , the most important semiconductor company in the world.
As explained by Robbins, the CEO, Nvidia has agreed to use Cisco's Ethernet with its own technologies used in data centers and artificial intelligence systems.
THE RESULTS OF THE SECOND FISCAL QUARTER
In its fiscal second quarter, which ended Jan. 27, Cisco reported a 6 percent decline in revenue year over year. Revenue fell from $2.77 billion to $2.63.
Revenue in the network products segment was $7.08 billion, slightly lower than the $7.10 billion expected by analysts.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/primo-piano/cisco-taglio-personale-obiettivi-fatturato/ on Thu, 15 Feb 2024 09:37:28 +0000.