Shulou(Shulou.com)11/24 Report--

Cisco, the technology giant, is planning to increase operating expenses by $1 billion to help solve the growing shortage and loss of talent in the technology sector.

Cisco plans to increase operating expenses by about $1 billion in fiscal 2023, which begins July 31, according to people familiar with the matter, some of which will be used to increase employee compensation to prevent employees from leaving.

Cisco CEO Chuck Robbins told executives in August that the company would increase operating expenses by $1 billion over the next 12 months, in part to slow a recent rise in employee turnover.

Cisco had just released its fiscal 2022 fourth-quarter earnings a few days earlier, but executives didn't discuss plans to raise operating costs on the conference call. Cisco's revenue was flat in the final quarter of its fiscal year, although it forecast in May that fourth-quarter revenue would fall 1% to 5%.

Cisco reported net income of $3.4 billion for the fiscal fourth quarter, down 3%. Earnings per share were $0.83, down 1 percent from a year earlier. The company's revenue beat Wall Street estimates of $12.78 billion.

Cisco has cut operating expenses over the past 12 months, and the new $1 billion in spending is surprising. In recent months, the tech giant has battled macro factors affecting its profits, including international tensions, a rebound in the COVID-19 epidemic and supply chain challenges.

Earlier this month, Todd Nightingale, senior vice president and general manager of Cisco's enterprise networking and cloud business, announced his departure to join edge cloud company Fastly as the company's new CEO effective Sept. 1.

Prashanth Shenoy, a marketing executive at Cisco for more than 20 years, also revealed on LinkedIn this month that he has left to join VMware as the company's vice president of cloud platform, infrastructure and solutions marketing.

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