Cisco to cut 7% jobs, sees $1 billion restructuring charges, stock up

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Cisco to cut 7% jobs, sees $1 billion restructuring charges, stock up

The logo of the telecommunications company Cisco Systems can be seen at a press event for the “Medibus” mobile medical practice. Christoph Soeder/dpa

Shares of Cisco were gaining around 8% in pre-market activity on the Nasdaq after the US technology conglomerate, in its fourth-quarter earnings call, announced a restructuring plan with around 7% cut in its global workforce.

The move, which is expected to allow the firm to invest in key growth opportunities and drive more efficiencies in its business, would result in total estimated pre-tax charges of up to $1 billion.

The restructuring and the planned job cuts are expected to impact around 6,000 employees from its total workforce. The company in February had announced 5% cut in its workforce, or over 4,000 jobs.

Cisco made the announcement after reporting fourth-quarter profit above market estimates, despite a drop. The firm also issued forecast for first quarter as well as fiscal 2025.

Cisco’s proposed charges consists of severance and other one-time termination benefits, and other costs. The company expects to recognize around $700 million to $800 million of these charges in the first quarter of fiscal 2025 with the remaining amount expected to be recognized during the rest of the fiscal year.

Regarding its financial figures, Cisco said it sees first-quarter earnings of $0.35 to $0.42 and adjusted earnings of $0.86 to $0.88 per share.

Revenue for the quarter is expected between $13.65 billion and $13.85 billion.

Analysts on average expect the company to report earnings of $0.85 per share on revenues of $13.65 billion. Analysts’ estimates typically exclude special items.

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