Cisco to Raise Costs by $1B to Stave Off Employees Leaving: Report

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Cisco Systems Intrinsic Value – According to a recent report from The Information, Cisco($NASDAQ:CSCO) is set to increase costs by approximately $1B over the next 12 months in an effort to boost employee pay and keep them from leaving the networking giant. This comes after Cisco reported fourth-quarter results earlier this week that topped expectations and said it anticipated sales to rise between 4% and 6% in fiscal 2023, ahead of expectations. The report notes that Cisco Chief Executive Chuck Robbins told employees that they would only receive 84% of their target bonuses for the performance of the past year, compared to a 10-year average of 98%. This has led to increased employee dissatisfaction with pay, according to the report. Cisco’s human resources department has said that it will overhaul its compensation structure to give workers a higher base pay and lower bonuses. It remains to be seen how this will affect Cisco’s market and earnings in the long term. However, the company is clearly taking steps to try to address employee concerns about pay.

Share Price

The move comes as the company faces increased competition from rivals such as Huawei and Arista Networks. CISCO SYSTEMS stock opened at $49.0 on Friday and closed at $48.7.

VI Analysis – Cisco Systems Intrinsic Value

Cisco Systems, Inc is an American multinational technology conglomerate headquartered in San Jose, California, in the center of Silicon Valley. The company develops, manufactures, and sells networking equipment. Together, they developed and manufactured the multi-protocol router systems, which revolutionized data networking. Today, Cisco Systems is a market leader in networking hardware, software, and services. Its products are used in a wide range of industries, including education, healthcare, government, and business. Cisco Systems has a long history of innovation, and its products are widely considered to be among the best in the industry. The fair value of Cisco Systems shares is around $50.0, as calculated by VI Line. The stock is currently trading at $48.7, which represents a fair price that is undervalued by 3%.

Summary

Cisco Systems Inc is planning to raise costs by $1 billion in an effort to keep employees from leaving, according to a report. The company is hoping the move will help it retain top talent, as well as keep lower-level employees from defecting to rivals, The Wall Street Journal reported. Cisco has been facing increased competition from the likes of Huawei Technologies Co. Ltd. and Arista Networks Inc In addition, the company has been struggling to grow its revenue, as its main product lines have come under pressure. The cost-cutting measures are expected to be announced during Cisco’s annual meeting with analysts on Wednesday. The company is also expected to provide an update on its strategy to turn around its business.