Due to a decline in sales, the US network equipment manufacturer Cisco wants to reduce its global workforce by around five percent – that would be more than 4,000 jobs.
The network equipment manufacturer Cisco is resorting to cutting thousands of jobs after a decline in sales. The global workforce will be reduced by around five percent, Cisco announced after the US stock market closed. At the end of the last financial year at the end of July, the US group had almost 85,000 employees. In the current quarter alone, the cuts will result in costs of around $500 million (466 million euros) for severance payments and other expenses. Another 300 million are likely to be added later.
For the current quarter, Cisco forecast sales of between $12.1 and $12.3 billion – while analysts on average had expected $13.1 billion. The earnings forecast was also below estimates. While the boom in artificial intelligence means a lot is being invested in special chips, especially from Nvidia, companies could reduce spending on network technology.
In the second fiscal quarter ended at the end of January, Cisco’s sales fell by six percent year-on-year to $12.8 billion. Profit fell by five percent to $2.6 billion. Cisco shares temporarily fell by more than five percent in after-hours US trading.
Source: Stern
