Cisco Systems, Inc. CSCO is reportedly set to restructure its operations, potentially resulting in thousands of job cuts as it aims to prioritize high-growth sectors.
The exact count of affected employees is still under consideration by the company, Reuters reported, citing three people familiar with the matter.
The announcement might be made as soon as next week, coinciding with the company’s earnings call scheduled for Feb. 14.
In November 2022, during an earnings call, Cisco announced a restructuring affecting around 5% of its workforce, resulting in $600 million in severance and other expenses, the report read.
In its previous earnings call, Cisco had reduced its full-year revenue and profit projections, indicating a slowdown in demand for its networking equipment.
The company attributed the weakness to a decrease in orders in the first quarter, citing customers’ focus on product installation and implementation, Reuters added.
In recent years, Cisco has faced supply chain challenges and a slowdown in demand following the pandemic, prompting a shift toward software solutions such as cybersecurity.
Earlier this month, Cisco inked a pact with Nvidia Corporation NVDA to facilitate the development of corporate AI computing infrastructures, broadening the accessibility of AI technology beyond major data-center operators.
This collaboration allows Cisco to integrate Nvidia’s AI-focused technology with its networking solutions.
The partnership enhances Nvidia’s distribution channels and enables Cisco to leverage the ongoing AI investment surge that has elevated Nvidia to the status of the most valuable chipmaker globally, reported Bloomberg.
Price Action: CSCO shares closed higher by 0.36% to $50.13 on Friday. Shares rose 0.02% to $50.14 after hours.
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