(Reuters) – Cisco said on Wednesday it would lay off 7 percent of its workforce to focus on higher-growth areas, including cybersecurity and artificial intelligence (AI).
The stock was up 5% in after-hours trading as the U.S. network equipment maker forecast sales for the current quarter beat expectations.
Cisco announced in February a plan to cut jobs worldwide involving 5% of its workforce, or more than 4,000 people.
The group announced the second phase of its layoff plan on Wednesday, confirming information reported by Reuters last week.
The layoffs should allow the company to “focus on growth areas like software, services, AI and cybersecurity, while balancing its financial obligations and reducing the percentage of hardware in its product mix,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.
Cisco expects its first-quarter revenue to be between $13.65 billion and $13.85 billion, with the midpoint of that range above analysts’ average estimate of $13.71 billion, according to LSEG data.
The group’s turnover stood at 13.64 billion dollars in the fourth quarter, ended on July 27. This result was higher than analysts’ expectations, who were counting on 13.54 billion dollars.
(Juby Babu and Jaspreet Singh; Camille Raynaud)
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