Cisco has reported that revenue for the business branch that houses Webex has fallen by ten percent.
The figures were revealed during the company’s second-quarter earnings call of fiscal year 2023, in which it was reported that Cisco earned $13.6bn in revenue, up seven percent year-over-year.
The decline in collaboration sales has been put down to a drop in meetings and collaboration devices, according to Scott Herren, Chief Financial Officer, Cisco.
He commented: “Internet for the Future was down 1%, driven by declines in optical and Edge. We saw growth in our Cisco 8000 offering and double-digit growth in web scale.
“Collaboration was down 10%, driven by declines in meetings and collaboration devices, slightly offset by growth in contact center.
“End-to-end security was up 7%, driven by our unified threat management and zero trust offerings.”
Q2 FY 2023 is the second quarter running that Cisco has seen a drop in collaboration sales, with a two percent decline in Q1.
Herran declared that the drop in Q1 was again down to a decline in meetings, which he said had been “partially offset by a growth in calling”.
Collaboration revenue has been up and down for Cisco, with the company recently seeing its income fall for four consecutive quarters before it saw a slight growth in Q4 FY 2022.
Despite inconsistent sales, Cisco is still making big moves on its collaboration front, as it has recently showcased a new range of collaboration devices for Microsoft Teams and unveiled a new microphone for hybrid working during ISE 2023.
The company said that its innovations are to help organisations achieve a ‘seamless’ hybrid work experience.
Cisco’s partnership with Microsoft will see the Teams platform run natively on Cisco collaboration devices, with certification expected in March 2023.
A Strong FY 2023?
Collaboration sales might be up and down, but FY 2023 is looking to be a strong year of overall growth for Cisco.
Cisco has matched its record-breaking quarterly earnings during Q2 FY 2023, which it had set during Q1.
Chuck Robbins, Chair and CEO of Cisco, said: “With Cisco’s strong Q2 performance, our fiscal 2023 is shaping up to be a great year.
“The modern, highly secure networks we are building serve as the backbone of our customers’ technology strategy.
“This, combined with the success of our ongoing business transformation and operational discipline, gives me confidence in our future.”
Despite the strong earnings results, Cisco commenced its restructuring plan during Q2, in which it reduced its workforce by laying off employees.
Speaking in November about the restructuring plan, Robbins commented:
“I would say that what we’re doing is rightsizing certain businesses.
“We’re really focused on resource moving into, like in the enterprise networking space, accelerating our platform strategy.
“We will be making significant investments in security and beefing up our team there and the capacity to continue to innovate there.”
The lay offs started in December 2022 as the company looked to shrink its workforce by five percent.
Cisco followed up on this with another round of lay offs in January 2023, which saw nearly 700 employees lose their jobs.
