The Cisco company had a 5% personnel cut due to restructuring

In a significant move, Cisco announced a workforce reduction plan on Wednesday, which will see around 4,250 jobs cut, constituting 5% of its workforce. This decision comes as the latest in a series of downsizing initiatives in the tech industry, a response to the ongoing cost-cutting trends following a market downturn two years ago. This move positions Cisco among several other tech giants such as Alphabet, Amazon, Microsoft, SAP, eBay, Unity, and Discord, all of which have also announced job cuts this year.

Tech Industry Job Cuts

The tech industry has seen a surge in job cuts, with January marking the busiest month for layoffs since March. According to Layoffs.fyi, 144 tech companies have collectively laid off almost 35,000 workers since the beginning of the year, highlighting a trend of restructuring and optimization within the sector.

Despite the announcement of job cuts, Cisco reported strong fiscal second-quarter results. The company's earnings per share stood at 87 cents (adjusted), surpassing the expected 84 cents. Moreover, their revenue reached $12.79 billion, exceeding the expected $12.71 billion. However, Cisco's revenue experienced a 6% decline year over year, with net income also dropping to $2.63 billion, or 65 cents per share, down from $2.77 billion, or 67 cents per share, in the previous year's quarter.

Guidance and Outlook

Following its quarterly performance, Cisco provided a light forecast, projecting earnings per share in the range of 84 to 86 cents on $12.1 billion to $12.3 billion in revenue. This estimate fell short of analysts' expectations of 92 cents per share on $13.09 billion in revenue. Additionally, for the full year, Cisco anticipates adjusted earnings per share of $3.68 to $3.74 and revenue of $51.5 billion to $52.5 billion, which is lower than analysts' projections of $3.86 in adjusted earnings per share and $54.26 billion in revenue.