Cisco to cut another 1,000 jobs as it struggles to regain footing

Dive Brief:

  • Cisco Systems Inc. plans to cut another 1,100 jobs despite reporting better than expected earnings for the fiscal third quarter, according to CNBC and Marketwatch. Cisco reported revenue of $11.94 billion for its third quarter, higher than the $11.89 billion revenue expected by a Thomson Reuters consensus estimate. But the company also issued worse-than-feared forward guidance: Cisco said it expects revenues to fall between 4% to 6% year-over-year in the fourth quarter.

  • Cisco Chief Executive Chuck Robbins said in a conference call that a slowdown in federal government spending was a large factor in the company's revised guidance, according to MarketWatch.

  • The new job cuts follow a workforce reduction announced last summer that affected 5,500 jobs.

Dive Insight:

Cisco is a classic example of a company that saw huge success in a tech age, but as demand for network equipment fell and cloud solutions grew, Cisco struggled to adapt and maintain its revenue streams. The company is now well into a restructuring effort, which is expected to be complete by next year. The question is whether the effort began too late.

As it trims workers, Cisco hasn't slowed its spending. The company has invested in solutions focused not on its core switching and routing business but in areas like security, IoT, next generation data center and cloud. Earlier this month, Cisco announced plans to acquire Viptela, a software-defined wide area network (SD-WAN) company, for $610 million, and in March, Cisco’s $3.7 billion purchase of AppDynamics became official. Making such broad and dramatic changes are bound to come with some pain and at significant expense.

Filed Under: IT Strategy Leadership & Careers