Cisco Systems, Inc. ( CSCO ) shares are trading higher in the premarket session on Thursday.

Yesterday, the company registered fourth-quarter revenue of $13.64 billion, beating the consensus estimate of $13.537 billion.

Cisco ( CSCO ) reported a 14% year-over-year growth in product orders, though this figure was up 6% when excluding the impact of Splunk. Despite this, total revenue fell by 10%, with product revenue decreasing by 15% and services revenue increasing by 6%. Splunk contributed approximately $960 million to total revenue for the fourth quarter of fiscal 2024.

The company reportedly revealed agendas to cut thousands of employees, per a filing.

This plan is projected to affect around 7% of Cisco's ( CSCO ) global workforce. The company anticipates recognizing up to $1 billion in pre-tax charges on its GAAP financial statements, which will include severance, one-time termination benefits, and other costs, primarily in cash.

Cisco ( CSCO ) expects to record approximately $700 million to $800 million of these charges in the first quarter of fiscal 2025, with the remainder to be recognized throughout the rest of the fiscal year.

Also Read: Cisco ( CSCO ) Q4 Earnings: Revenue Beat, EPS Beat, Product Orders Up 14% As Customers Rely On Networking Equipment Maker In New ‘Era Of AI’

According to Chief Financial Officer Scott Herren, layoffs are not just about strengthening profits, reported Bloomberg. Cisco ( CSCO ) needs to turn further into cybersecurity, cloud systems and artificial intelligence-related products, so it’s releasing resources to do that, Herren said in an interview, Bloomberg added.

On a non-GAAP basis, Cisco’s gross margins improved, with total gross margin at 67.9% (up from 65.9% a year earlier), product gross margin at 67.0% (up from 65.5%), and services gross margin at 70.3% (up from 67.5%).

Non-GAAP operating income was $4.4 billion, reflecting a 17% decline, and the non-GAAP operating margin stood at 32.5%.

Cisco ( CSCO ) reports adjusted earnings of 87 cents per share, beating analyst estimates of 85 cents per share.

Price Action: CSCO shares are trading higher by 8.16% to $49.15 premarket at last check Thursday.

Image: Shutterstock/ Anucha Cheechang

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