Layoff News: The fourth quarter i.e. May-July 2024 was better than market expectations for networking company Cisco. However, the company is going to lay off about 7 percent of its employees from all over the world.
Its effect was also seen on the shares and the buying of shares increased. This is the second time this year that large-scale layoffs are going to happen in Cisco. In February, 5 percent of its employees were laid off, under which 4 thousand had to lose their jobs. At the end of the financial year 2023 (August-July), it had 84,900 employees.
Highlights of Cisco Q4 results
Cisco earned a revenue of $13.64 billion, which was higher than the London Stock Exchange Group (LSEG) estimate of Rs 13.54 billion. Apart from this, earnings per share were 87 cents, which was higher than the estimate of 85 cents. Along with the results, the company also informed in the exchange filing that it is working on a restructuring plan which will cost $1 billion (tax has not been deducted yet).
The company says that restructuring will give it an opportunity to invest in growth areas and will also increase the capacity of the business. Of the expenditure on this, $70-8 billion will be spent in this quarter and the rest will be spent in the remaining months of the financial year 2025.
Sales decline for the third consecutive quarter
Cisco’s sales have declined for the third consecutive quarter. The company’s core business is networking, which includes switches and routers. This business has been declining since big companies started moving to the cloud years ago. In such a situation, the company also started focusing on software and security business. Its revenue in the July quarter may have been better than market expectations, but according to the company, it declined by 10 percent on an annual basis. Talking about the full financial year, sales declined for the first time since 2020. Now talking about the future, there may be another quarterly decline and the company says that in the October quarter its revenue may fall from $ 1470 million to $ 1365-1385 million on an annual basis. LESG estimates a revenue of $ 1370 million.
