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Cisco Announces Layoffs Despite Solid Quarter Results

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Cisco Announces Layoffs Despite Solid Quarter Results

American technology company Cisco has announced plans to lay off 5% of its workforce, approximately 4,000 people, following a disappointing quarter. The company reported a 5% decrease in profits and a 6% decrease in revenues in the second quarter of its fiscal year.

The restructuring, aimed at realigning the organization and allowing for more investment in key priority areas, will cost about $800 million in severance and other compensation. Most of the layoffs are expected to occur in the current quarter.

While Cisco’s half-year results showed a 15% increase in profits, reaching $6.272 million, and a slight increase in revenue to $27.459 million, analysts expressed concern over the company’s forecasts for the current quarter. CEO Chuck Robbins also cautioned about the company’s approach to deals, citing a “high level of uncertainty” in the macroeconomic environment.

Furthermore, Cisco recently announced its plans to purchase cybersecurity company Splunk for $28 billion, with the goal of bolstering its next generation security products with Artificial Intelligence (AI).

Following the news, Cisco shares fell more than 5% in after-hours trading on Wall Street. These results and the company’s cautious outlook reflect the ongoing challenges in the technology sector.

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