Cisco to layoff 4,000 employees globally; cuts annual revenue target

Tech firm Cisco Systems has said that it would layoff 5% of its global workforce affecting over 4,000 jobs. The firm has also lowered its annual revenue target to $51.5 billion - $52.5 billion range, from the previous estimate of $53.8 billion to $55 billion.

The shares of Cisco declined by over 5% during extended trading on February 14.

Cisco layoffs

Cisco concluded the previous year with almost 85,000 employees and is undergoing layoffs and a broader restructuring effort to concentrate on high-growth areas.

Analysts expect demand for Cisco's products to remain under pressure, as clients in the telecom industry restrict spending, prioritizing clearing their excess inventory of networking gear.

Also Read: Cisco announces workforce downsizing amidst shifting market trends

The decision to downsize comes as Cisco faces challenges stemming from a decline in demand for its products. In a previous earnings call, the company revised its full-year revenue and profit forecasts downwards, citing a slowdown in orders. This shift in demand reflects customers' current focus on deploying and integrating existing products rather than investing in new ones.

However, Cisco is not alone in its restructuring efforts. The tech sector as a whole has been grappling with layoffs and uncertainty since the latter part of 2022. Various companies have been trimming their workforces as they seek to cut costs and streamline operations in response to changing market dynamics.

Other major tech firms such as Amazon, Alphabet, and Microsoft have also implemented layoffs in recent weeks, affecting various divisions and regions. Additionally, startups like Snap and eBay have announced workforce reductions as they navigate evolving business landscapes.