Cisco announces massive layoffs again, targeting thousands of employees

Jakarta, CNN Indonesia —

United States (US) technology company. Cisco Systems will terminate employment again (Layoffs) to thousands of people or about 7 percent of their workforce worldwide.

This is in line with the company’s move to shift focus to areas with high growth potential.

The company, based in San Jose, California, is estimated to record pre-tax charges of up to US$1 billion or the equivalent of IDR 15.71 trillion (assuming an exchange rate of IDR 15,718 per US dollars) in connection with the proposed plan. layoffs.

These big discounts come on top of another round of cuts made by Cisco earlier this year.

Last February, Cisco announced that it would lay off 5 percent of its workforce worldwide, or the equivalent of 4,000 workers, in line with reducing its revenue target. their annual income.

However, shares of the listed company jumped 5 percent in extended trading after it forecast better-than-expected first-quarter earnings.

Cisco estimates revenue in the first quarter of 2024 in the range of US$ 13.65 billion and US$ 13.85 billion or the same as IDR 214.52 trillion-IDR 217.7 trillion, and on average there is -analyst estimates it at US$ 13.71 billion or IDR 215.49 trillion.

The largest router maker has been grappling with slow demand and supply chain constraints in its core business.

This has encouraged the company to diversify with measures such as the purchase of the cybersecurity company Splunk for US$ 28 billion or IDR 440.1 trillion made last March.

The purchase is expected to reduce reliance on single-use equipment sales by boosting its subscription business.

“As we strive to build on our performance, we remain focused on consistent growth and performance as we invest to win in AI, cloud, and cybersecurity, while maintaining return on capital,” said Cisco CFO Scott Herren in an official statement. CNN Business.

The company launched a $1 billion fund in June to make investments in AI startups such as Cohere, Mistral AI and Scale AI. Cisco said at the time that it had made 20 AI-focused acquisitions and investments over the past few years.

Cisco reported revenue of US$13.64 billion or IDR 214.36 trillion for the fourth quarter ended July 27, compared to estimates of US$13.54 billion or IDR 212.78 trillion.

Adjusted earnings per share were 87 US cents, compared to estimates of 85 US cents.

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