In response to the economic challenges affecting the technology sector, networking equipment giant Cisco Systems has announced intentions to reduce its workforce by more than 4,000 positions, representing approximately 5 percent of its global employee base.
As reported by Reuters, this decision comes as the company adapts to a challenging economic environment that has led to numerous job cuts across the technology industry this year. Following the announcement, Cisco’s shares saw a decline of more than 5 percent in after-hours trading.
Moreover, the company has adjusted its annual revenue projection, revising it downward to a range between $51.5 billion and $52.5 billion. This is a decrease from the previously anticipated range of $53.8 billion to $55 billion.
Acknowledging the difficult market conditions, Cisco CEO Charles Robbins remarked, “We also continue to see weak demand with our telco and cable service provider customers.” Constraints on spending in the telecom industry have contributed to the subdued demand for Cisco’s products.
Industry analysts anticipate ongoing pressure on the demand for networking equipment as clients within the telecom sector prioritize reducing excess inventory. Joe Brunetto, an analyst at Third Bridge, foresees the resolution of the networking hardware inventory buildup likely occurring in the latter half of 2024 or early 2025.
Despite the prevailing challenges, Cisco is strategically positioning itself for future growth by emphasizing artificial intelligence initiatives and forging strategic partnerships.
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