Cisco announces 6,000 layoffs: 8% of total employees

Late evening of August 13th, Beijing time, Cisco announced on Wednesday that it will lay off up to 6,000 employees as part of a massive restructuring.

The layoffs came after Cisco reported fourth-quarter results that beat analysts' expectations.

Cisco CEO John Chambers said Cisco must focus on areas where it can grow to become the "number one IT supplier." He said the transformation of Cisco "requires us to make very difficult decisions."

The layoffs represent about 8% of Cisco's total workforce. Cisco expects to record up to $700 million in charges related to the layoffs. Cisco is currently facing challenges in emerging markets and its service provider video business is also performing poorly. A year ago, Cisco said it would lay off 4,000 people, accounting for 5% of its total workforce.

Cisco's fourth-quarter earnings report showed revenue of $12.36 billion and earnings per share of 55 cents. Analysts on average expected Cisco's fourth-quarter revenue of $12.15 billion and earnings per share of 53 cents, compared with revenue of $12.42 billion and earnings per share of 52 cents in the same period last year.

Cisco released its fourth-quarter earnings report after the U.S. stock market closed on Wednesday. In after-hours trading on Wednesday, Cisco's stock price fluctuated.

In May, Cisco reported quarterly results that beat analyst expectations and a strong outlook, which pleasantly surprised Wall Street. The stock has risen 10% in the past three months on expectations of a recovery in Cisco. So far this year, Cisco shares have risen 12%, while the S&P 500 has risen 5.1% over the same period.

However, despite the signs of recovery, Cisco has not yet returned to growth. In the fourth quarter, Cisco's revenue fell 0.5% year-on-year, and net profit fell 1% year-on-year. Chambers said Cisco expects revenue to remain flat in the first quarter, with a year-on-year increase of about 1%.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.