No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Telecoms and networking tech giant Cisco Systems has announced it is cutting its workforce by nearly 4,000 as part of its so-called 'Path Forward' restructuring plan costing $1bn to compete in the AI era.
Cisco chair and chief executive Chuck Robbins said, in order to stay competitive, the company was shifting investment towards areas "where demand and long-term value creation are strongest".
"This means making hard decisions - about where we invest, how we're organized, and how our cost structure reflects the opportunity in front of us," he said in a statement.
The move was welcomed by the market, with shares in the Nasdaq-listed stock surging nearly 17% in pre-market trading on Wall Street to $118.85 - a new record high.
The restructuring plan, which will see Cisco shed nearly 5% of its total employee base, will allow it to invest in key growth opportunities including silicon, optics, security and AI.
]The company will incur pre-tax charges of up to $1bn consisting of severance and other one-time termination benefits, along with other costs, it said.
"Cisco expects to recognize approximately $450 million of these charges in the fourth quarter of fiscal 2026 with the remaining amount expected to be recognized during fiscal 2027," the firm said in its third-quarter earnings release on Wednesday evening.
Employees whose roles are impacted will begin to receive notifications on 14 May, the company said.
"To those leaving Cisco, thank you for your contribution, your dedication, and the mark you have made on this company. We are deeply grateful and are committed to handling this transition with the care, clarity, and respect that defines our culture," Robbins said.
The announcement came alongside third-quarter results, which showed revenues rising to $15.84bn in the three months to 25 April, from $14.15bn the year before, while net income rose to $3.37bn from $2.49bn.
The results, which beat analysts' expectations, included an upgrade to full-year sales guidance to $62.8bn-63.0bn, from $61.2bn-61.7bn previously.