Menu
Cisco flags layoffs in major restructuring effort

Cisco flags layoffs in major restructuring effort

Restructuring, which includes a voluntary early retirement program and layoffs, will begin this quarter

Chuck Robbins (Cisco)

Chuck Robbins (Cisco)

Credit: Cisco

Cisco has forecast first quarter revenue and profit below Wall Street estimates and laid out a restructuring plan, as the coronavirus crisis forced its clients to hold back spending. Shares of the top network equipment maker fell nearly five per cent after the bell.

The restructuring, which includes a voluntary early retirement program and layoffs, will begin this quarter, the company said, adding that it expected to recognise a related one-time charge of about US$900 million.

On a conference call with investors, CEO Chuck Robbins said Cisco also plans to reduce its expenses by $1 billion on an annualised basis "over the next few quarters."

The company also announced that chief financial officer Kelly Kramer will retire from Cisco, but will remain with the company until a successor is found.

Cisco expects current-quarter revenue to drop between nine per cent and 11 per cent from last year, implying a range of between $11.71 billion and $11.97 billion, while analysts had expected $12.25 billion. It also forecast adjusted earnings of 69 cents to 71 cents per share, below estimates of 76 cents, according to Refinitiv IBES data.

Kramer told Reuters that Cisco will continue to acquire smaller companies to help boost revenue and that its $2.84 billion acquisition of Acacia Communications Inc remains on track. The deal was slated to close before the end of Cisco's fiscal 2020 last month, but the company said it is still awaiting approval from Chinese regulators.

"We still feel good about it. We're responding to their requests as fast as we can to make sure there are no issues," Kramer said. "We are focused on getting it done."

For the fiscal fourth quarter ended July 25, revenue fell about nine per cent to $12.15 billion, but beat estimates of $12.08 billion, as more people working from home boosted demand for its web security and teleconferencing tools. Excluding items, Cisco earned 80 cents per share in the quarter, beating estimates of 74 cents.

(Reporting by Ayanti Bera in Bengaluru and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila, Richard Pullin and Grant McCool)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags cisco

Brand Post

Featured

Slideshows

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

The leading female front runners of the New Zealand ICT industry joined together for the annual Reseller News Women in ICT Awards event at the Hilton in Auckland, during which hundreds of guests celebrated 13 outstanding individuals who won awards, chosen from more than 50 finalists representing over 30 organisations.

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards
Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Show Comments