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Cisco to cut 4,000 jobs amid growth slowdown:- Cisco Systems, the leading manufacturer of networking equipment, is facing the challenge of a major slowdown in corporate technology spending, leading to a significant impact on its sales growth. As a result, the company has announced a restructuring plan that involves cutting over 4,000 jobs, which accounts for approximately 5 percent of its global workforce. This move is aimed at reducing costs and aligning the company with current market conditions. The restructuring plan is expected to result in costs of approximately $800 million for Cisco. Additionally, the company has revised down its annual revenue target, now forecasting a range between $51.5 billion and $52.5 billion, compared to the previously projected $53.8 billion to $55 billion. This downward adjustment in revenue expectations has caused Cisco's shares to decline by more than 5 percent in after-hours trading.
Chuck Robbins, the CEO of Cisco, explained that the current economic uncertainty has caused customers to postpone orders and reassess their equipment needs. This caution and careful evaluation of investments are a response to the economic concerns faced by organizations. Cisco's announcement is consistent with the broader trend in the tech industry, as many companies are implementing workforce reductions in response to economic challenges. In 2024 alone, nearly 35,000 job cuts have been announced across the sector, according to data from Layoffs.fyi, a platform tracking tech layoffs. Looking ahead, Cisco anticipates sales of $12.1 billion to $12.3 billion for the fiscal third quarter, ending in April, which falls short of analysts' average estimates. The company also expects adjusted earnings per share in the range of 84 cents to 86 cents, below the consensus prediction of 92 cents. These projections reflect the impact of the current economic climate on Cisco's business performance.
In conclusion, Cisco Systems is taking steps to address the challenges stemming from the slowdown in corporate technology spending by implementing a restructuring plan that includes significant job cuts. The company is focused on reducing costs and adapting to the current market environment. However, the revised revenue expectations and lower earnings outlook indicate the ongoing impact of economic uncertainty on Cisco's business operations.
