Cisco has announced job losses equivalent to 7% of its global workforce. The announcement from the networking giant came as the firm announced fourth-quarter revenues for this year of $13.6bn – a decrease, it added, of 10% compared to this time last year. This was despite the growth in demand for its product portfolio, which Cisco said had increased by 14% in the same period.
“We delivered a strong close to fiscal 2024,” said the firm’s chief executive, Chuck Robbins. “In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organisations in the era of AI.”
Cisco posts mixed results
Elsewhere, Cisco’s fourth-quarter fortunes were mixed. Product revenue, for example, declined 15%. While it was up by a startling 81% and 41% in Cisco’s security and observability divisions respectively, revenues in networking took a dive of 28% while “product revenue in Collaboration,” said the firm, remained “flat.” The company’s acquisition of Splunk appears to be paying dividends for its bottom line, however, with the subsidiary contributing $960m in total revenue – equivalent to 6% of the growth in demand for Cisco’s overall product range.
Total revenues, meanwhile, were down across all geographic regions, with the decline most pronounced in the Americas and EMEA regions. This follows similarly poor results for the company earlier in the year, losses that forced Cisco to announce its first round of 4,000 job losses in February. The networking firm said that the redundancies would incur pre-tax charges of close to $1bn. These cuts, Running Point Capital’s chief investment officer Michael Ashley Schulman told Reuters, would allow it to “maintain focus on growth areas such as software, services, AI and cybersecurity.”
Firm’s pivot to AI continuing
Recent months have seen Cisco pivot very publicly away from its core networking business to embracing AI-driven solutions in cybersecurity and software. This included its $28bn acquisition of Splunk late last year, in addition to the launch of its AI ‘HyperShield’ security solution and the creation of a purpose-built AI investment vehicle.
Despite its promotion of AI-powered threat detection, Cisco networking vulnerabilities continue to appear in the daily mill of cybersecurity news. Patches issued by the firm in recent months have tackled at least two bugs allowing hackers to change administrator passwords, one that permits threat actors to conduct remote code execution on end-of-life IP phones and another that allows attackers to add root users on secure email gateway appliances.
Read more: As AI transforms cybersecurity, Cisco’s Martin Lee has only one piece of advice for IT managers: expect the unexpected
