In a Wednesday post-earnings interview with CNBC's Jim Cramer, Cisco CEO Chuck Robbins listed several factors leading to a light quarterly and full-year outlook, including weak orders from service provider customers.
“First of all, we saw more caution with our customers this quarter than we saw in the previous quarter,” Robbins said, adding that inventory consumption is taking longer than the company expected. Robbins also said there was “persistent weakness” in demand from its telecom and cable service provider customers, with orders down 40% during the quarter.
“These three things lead us to review the guidance for the rest of the year,” he said. “But we believe we will overcome this inventory consumption issue by the end of 2024, and we hope the other two issues resolve themselves soon, and we see some good times ahead.”
Cisco also announced Wednesday that it will cut 5% of its workforce, Or about 4,000 jobs, reflecting layoffs occurring at other technology companies. Cisco shares fell as much as 9% in extended trading.
“Obviously when you're off plan like we are this year, because of these issues that we've talked about, we have to adjust our expenses,” Robbins said. “That's what we did, so it won't be easy, but we'll get through it.”
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