Cisco Tumbles After Weak Forecast Shows Recession Biting
- CEO Chuck Robbins pledges to reduce costs by $1 billion
- Hardware-related sales fell 16% as customers delayed orders
Photographer: David Paul Morris/Bloomberg
Cisco Systems Inc. shares tumbled Thursday after the company gave a lackluster sales forecast, signaling that businesses are spending less in the pandemic-driven recession.
Chief Executive Officer Chuck Robbins pledged to reduce expenses by $1 billion through a reorganization that will include job cuts and early retirement for some workers. The plan will cost about $900 million, which will include severance and other “termination benefits,” the company said in a regulatory filing. Chief Financial Officer Kelly Kramer is also leaving.
Revenue will fall 9% to 11% from a year earlier in the fiscal first quarter, which ends in late October, the San Jose, California-based company said Wednesday in a statement. Analysts on average had projected a decline of about 7%. Adjusted profit will be 69 cents to 71 cents a share, lower than Wall Street expectations of 76 cents, according to data compiled by Bloomberg.