Cisco has cut 4,000 jobs, equating to five percent of its workforce, after posting its second quarter financial results on Wednesday (14 February).
Although Cisco’s software subscription revenue was up five percent year-on-year, the company’s total software revenue was flat year-on-year and its total revenue, which amounted to $12.8bn, was down six percent year-on-year. Product and service revenues were both down nine percent and four percent respectively.
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Cisco CEO Chuck Robbins noted in the earnings call that demand for Cisco’s telco and cable services was on the decline.
However, the company demonstrated continued optimism about its partnership with Nvidia, particularly in developing AI technology. Robbins stated that Nvidia had already showed an interest in using Cisco’s ethernet in its data centres.
“We continue to align our investments to future growth opportunities,” stated Robbins. “Our innovation sits at the center of an increasingly connected ecosystem and will play a critical role as our customers adopt AI and secure their organisations,” he added.
Layoffs have continued to plague the tech industry in 2024.
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By GlobalDataThe global tech industry lost around 240,000 jobs in 2023 alone and companies including eBay and TikTok have recently made layoffs, losing over 1,000 employees collectively in January.
Cisco’s CFO Scott Herren stated, in light of the results, that the company would continue to remain focused on creating good financial results.
“Focused execution and operating discipline drove our solid top and bottom-line results and strong margins in Q2,” he stated.
“We are making good progress in our business model shift to more recurring revenue while remaining focused on financial discipline, operating leverage and shareholder returns, as evidenced by our increased dividend,” added Herren.
