Recently, the American network giant Cisco (Cisco) announced that due to the current severe economic conditions, the wave of layoffs in the technology industry continues to prolong, and Cisco will lay off 5 employees worldwide, equivalent to 4,000 jobs. As a result of this decision, Cisco's revenue target for the current year was lowered to $51.5 billion to $52.5 billion from $53.8 billion to $55 billion.
According to Charles Robbins, CEO of Cisco, demand for Cisco products is under pressure as telecom customers limit spending and prioritize clearing excess inventory of network equipment. Analyst Joe Brunetto expects that the problem of network hardware inventory accumulation will be resolved in the second half of 2024 or early 2025.
According to LSEG data, Cisco expects Q3 revenue to fall between $12.1 billion and $12.3 billion, down from the original forecast of $13.1 billion. Prior to that, Reuters reported that Cisco was planning to lay off employees and restructure its business to focus on high-growth areas.
The layoffs are expected to result in $800 million in pre-tax expenses for Cisco, including severance and other expenses. The majority of the charges are expected to be reflected in the first half of fiscal year 2025.
Despite the current tough economic conditions, Cisco will continue to aggressively invest in innovation and growth to meet market challenges. We will keep a close eye on the market dynamics and look forward to Cisco's greater growth in the future.