COMP NEWS – Tech giant Cisco is slashing around 5% of its workforce, cutting more than 4,000 jobs as it seeks to increase its profits.

Cisco announced plans to cut 5% of its workforce on Wednesday, a decision that will result in the elimination of about 4,250 jobs. Shares of Cisco were down as much as 9% in extended trading.

 

It’s the latest tech company to downsize in 2024, as the industry continues to squeeze out costs following the market downturn that hit two years ago. January was the busiest month for job cuts in the industry since March, as Alphabet, Amazon, Microsoft and SAP all said they were eliminating positions, as did eBay, Unity and Discord. So far this year, 144 tech companies have laid off almost 35,000 workers, according to the website Layoffs.fyi.

 

In addition to disclosing the job cuts, Cisco reported strong fiscal second-quarter results but gave a light forecast. Here’s how it did in comparison with the consensus from LSEG, formerly known as Refinitiv:

 

• Earnings per share: 87 cents, adjusted, vs. 84 cents expected
• Revenue: $12.79 billion, vs. $12.71 billion expected

 

Cisco’s revenue declined 6% year over year during the quarter, which ended on Jan. 27, according to a statement. Net income fell to $2.63 billion, or 65 cents per share, from $2.77 billion, or 67 cents per share, in the year-ago quarter. The company has yet to close its $28 billion acquisition of monitoring and security software maker Splunk.

 

Cisco now expects to complete the deal late in the first calendar quarter or early in the second quarter, CEO Chuck Robbins said on a conference call with analysts.

 

Revenue from networking products totaled $7.08 billion, slightly below the $7.10 billion consensus among analysts surveyed by StreetAccount.

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