Cisco Systems is planning to lay off 7% of its employees, which amounts to approximately 5,900 jobs, as the company shifts its focus to more rapidly growing areas in technology, such as artificial intelligence and cybersecurity.
It is the second round of job cuts this year for Cisco, a San Jose-based networking equipment maker. In February, the company had announced plans to cut about 4,000 jobs.
Driving the news: The layoffs come as Cisco aims to invest $1 billion in tech startups to develop reliable AI products and has also entered into a partnership with Nvidia to develop infrastructure for AI systems.
- Unlike chipmaker Intel Corp., which recently announced job cuts and disappointed investors, Cisco’s shares were up about 6% after-hours on Wednesday, indicating a more positive investor response.
- Cisco has also ventured into cybersecurity, launching a cybersecurity readiness index in March to help businesses measure their resiliency against attacks.
By the numbers: In its fiscal fourth quarter, Cisco reported earnings of $2.16 billion, or 54 cents per share, down 45 percent from the same period a year ago. However, its adjusted earnings were 87 cents per share, beating analysts’ expectations.
- The company’s revenue fell 10 percent to $13.64 billion from $15.2 billion in the previous year’s fourth quarter.
- For the current quarter, Cisco is forecasting adjusted earnings of 86 cents to 88 cents per share on revenue of $13.65 billion to $13.85 billion.
