2024-08-15 19:22:06
The shares of the American technology company Cisco rose up to 10.65% after the opening of the Nasdaq, after the company announced a new strategy together with a round of layoffs that will affect 7% of its workforce, around 6,300 people due to the 90,400 workers the company has accordingly Bloomberg. The move comes after the publication of the closing of its accounts for the last fiscal year, when it received a profit of 10,320 million dollars (9,421 million euros), 18.2% less than a year before. Last February another adjustment plan had already been announced for 5% of its workforce.
Cisco’s core business is to provide products and services to help businesses build computer networks, including switches, routers, and software at scale, for small businesses and industrial scale. The firm has announced a plan to move more towards offering computer services such as cyber security, as well as new products to try to take advantage of artificial intelligence, an area where it lags behind other computer manufacturers. hardwarefor example Nvidia.
Despite the momentum of the initial increases in the stock market due to layoffs, as the day has passed it has lost strength. With an hour to go before the close of US stock markets, they rose 6.5%, which was enough to ease the company’s decline so far this year to about 4%.
Cisco’s annual revenue was $53,803 million, a figure of 5.6% lower than the previous year, with a 9% decrease in product sales, to $39,253 million, while revenue from services grew by 5%, up to 14.55 billion dollars.
In the fourth quarter of its fiscal year, Cisco received a net profit of $2,162 million, 45.4% less, while the company’s revenue fell 10.3% compared to the same period of the previous year, up to 13,642 million dollars.
“We’ve closed fiscal 2024,” said Chuck Robbins, president and CEO of Cisco. “In our fourth quarter, we’ve seen continued customer demand with order growth across the company as customers rely on Cisco to connect and protect all aspects of their organizations in the age of AI,” he said.
“Revenue, gross margin and earnings per share in the fourth quarter were at the high end or above our guidance range, reflecting our operating discipline,” said Scott Herren, Cisco’s chief financial officer.
Looking ahead to the year 2025, the multinational hopes to achieve a turnover between 55,000 and 56,200 million dollars, as well as earnings per share of between 1.93 and 2.05 dollars.
Layoffs of 6,300 people
In terms of personnel cuts, specifically, Cisco announced a restructuring plan that will allow it to “invest in key growth opportunities and drive greater efficiency in its business” and will reduce approximately 7% of its global workforce, which would mean an adjustment of more than 6,300 jobs.
For this plan, the company expects to take pre-tax charges of up to $1 billion, including severance payments and other related costs. Cisco expects to recognize approximately $700 million to $800 million of these charges in the first quarter of its fiscal 2025, which covers the months of August and October, and expects the remaining amount to be recognized during the quarter other of the fiscal year.
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