Cisco responds to declining revenue with job cuts

In a targeted response to declining sales figures, the networking giant Cisco announced a significant reduction in its global workforce. The corporation plans to lay off about five percent of its employees, which meant nearly 4,250 of the just under 85,000 workers at the time of the last fiscal year-end in late July. The cost of the planned cuts amounts to an estimated 500 million US dollars in the current quarter alone, including severance and other associated expenses. Further costs of 300 million US dollars could impact future periods. The forecast for the current quarter, which Cisco itself set at a revenue range of 12.1 to 12.3 billion US dollars, fell significantly short of analysts' expectations, who had averaged 13.1 billion US dollars. Likewise, the company's earnings assessment missed market forecasts. The industry is simultaneously experiencing a surge in investment in specialized chips, especially for artificial intelligence applications, predominantly driven by Nvidia. Experts speculate that this could lead to companies might reduce their investments in networking technology. Cisco itself had to report a six percent decrease in revenue to 12.8 billion US dollars in the second fiscal quarter, which ended in late January, while profit fell by five percent to 2.6 billion US dollars. These results led to a temporary slump in Cisco's share price in after-hours trading by more than five percent.