RESEARCH TRIANGLE PARK – Cisco says it spent $900 million this past quarter through a series of moves designed to “restructure” the company.
However, it did not say how many of its 70,000-plus employees were affected.
Cisco CEO Chuck Robbins had said he would cut costs by some $1 billion due to fallout from the pandemic and global economic slowdown as well as changing the tech giant for future development.
In a footnote to its earnings Cisco noted:
“In the first quarter of fiscal 2021, we initiated a restructuring plan, which includes a voluntary early retirement program, in order to realign the organization and enable further investment in key priority areas with total estimated pretax charges of approximately $900 million consisting of severance and other one-time termination benefits, and other costs.
“We recognized $602 million of these charges during the first quarter of fiscal 2021. We expect to recognize approximately $200 million of these charges in the second quarter of fiscal 2021 with the remaining amount to be recognized during the rest of the fiscal year.”
Cisco employs several thousand employees at its large RTP campus.
Regarding the financial report, Robbins hailed “signs of improvement.”
“Cisco is off to a solid start in fiscal 2021 and we are encouraged by the signs of improvement in our business as we continue to navigate the pandemic and other macro uncertainties,” Robbins said in a statement.
“Our focus is on winning with a differentiated innovative portfolio, long-term growth and being a trusted technology partner offering choice and flexibility to our customers. We see many great opportunities ahead as every company in every industry is accelerating its digital-first strategy.”
Cisco (CSCO) shares jumped 9% immediately after the earnings report.
According to CNBC, Cisco beat Wall Street expections:
- 76 cents per share, adjusted, for earnings, vs. 70 cents per share as expected by analysts, according to Refinitiv.
- $11.93 billion in revenue, vs. 11.85 billion as expected by analysts, according to Refinitiv.