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Cisco to chop over 4,000 in restructuring effort
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Company is hoping that it can gain on AI and software in the future
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CEO expects enterprise spending to start to grow again by end of 2024
Networking vendor Cisco said on it its second quarter 2024 earnings call on Wednesday evening that it is laying off 5% of its global - or around 4,250 people - as it faces a slowdown in corporate spending and macro uncertainty.
The company’s CEO Chuck Robbins said that the firm is restructuring to focus on high-growth business areas such as software, which was bolstered by its major $28 billion Splunk acquisition, and artificial intelligence (AI), which Cisco has just signed a major deal with Nvidia to address.
“Customers are pushing things out and putting a little more scrutiny on them,” Robbins said of the “digesting inventory” phase that enterprise customers are in right now. Robbins said that the corporate spending slowdown will start to lift by the end of 2024.
Robbins noted, however, that wireless and cable service providers aren’t expected to start spending again until 2025.
Cisco's net income for the quarter fell to $2.63 billion from $2.77 billion a year ago.
The company said it expects annual revenue of $51.5 billion to $52.5 billion for the full year. It had previously predicted $53.8 billion to $55 billion for 2024.