Cisco announced a restructuring plan which involves cutting its global staff of 90,400 by 7 per cent, a loss of more than 6,300 jobs, while CEO Chuck Robbins (pictured) explained a move to bring its networking, security and collaboration teams under one umbrella.    

The company stated in a US Securities and Exchange filing the restructuring and job cuts would enable investment in growth areas and boost efficiency.

Cisco expects to record pretax charges of up to $1 billion “consisting of severance and other one-time termination benefits, and other costs”.

It will recognise approximately $700 million to $800 million of those charges in Q1 of fiscal 2025 (which began in late July) with the rest due in the remainder of the year.

The vendor laid off 4,000 employees in February.

CFO Scott Herren stated Cisco is investing in AI, cloud and cybersecurity. In June, it announced a $1 billion fund for investments in AI start-ups including Cohere, Mistral AI and Scale AI. 

On an earnings call for fiscal Q4 2024 (the period to 27 July), Robbins stated it hit a $1 billion run rate for AI in the webscale space.  

Reorganisation
The newly combined division is led by Jeetu Patel as EVP and chief product officer. He previously served as EVP and general manager of security and collaboration.

Long-time Cisco executive Jonathan Davidson becomes an adviser to Robbins, having previously been an EVP and GM of the networking team and holding various high-level positions over a 22-year spell with the company.  

Robbins said the pace of the AI revolution and demand from its enterprise customers drove the combination of the divisions.

“I just felt like it was important for us to have a single leader.”

Fiscal Q4
Cisco reported revenue of $13.4 billion, down 10 per cent year-on-year. Net income fell 45 per cent to $2.2 billion.

Networking revenue dropped 28 per cent to $6.8 billion, with security up 81 per cent to $1.8 billion.

Collaboration sales were flat at $1 billion.

Splunk contributed $960 million.

It expects fiscal Q1 revenue of $13.6 billion to $13.8 billion.