There’s a bunch of reasons:

• Everyone overbought on infrastructure during the pandemic, and spend is down because those sales were pulled forward.
• A lot of organizations cut their own datacentre spend, which means that high-margin router and core switch purchases are down in general.
• Edge switches, which are still being bought, last forever, are lower-margin, and Cisco isn’t the only game in town on them. Heck, the whole reason for buying Meraki a few years ago was to capture one of the few growth areas, but they got greedy on pricing
• Teams and Zoom are eating into Webex and UCS (or however they branded it these days), and without people needing to buy Cisco switches and phones to work with a UCS solution, they lose a lot of network effects in sales.
• Firewalls, which everyone needs, are not where Cisco’s the leader.

tl;dr, the stuff Cisco does well (core network, edge network) is now a low-margin, low-growth mature market, and the higher-growth markets (voice, collab) they frankly aren’t very good on, and their presence in depended on your using their low-growth stuff (if you don’t need Cisco for phone or WebEx, why spend on Cisco switches?)

I can’t stress how much Teams and Zoom have disrupted traditional voice and collaboration, which was a cash cow for Cisco. I can see Cisco wanting to do the AI thing to try to keep people in their call centre solution, but why would I spend Cisco levels of money on WebEx plus AI when I already pay Microsoft for Teams and Dynamics and the Azure AI stack (if I’m a big company). Smaller companies won’t even give Cisco a second look; they’ll use an SMB solution instead.

In case you’re wondering why Microsoft chases every niche, this is why. Microsoft almost had this happen to them in the 1990s when they got complacent and watched as the open internet almost made their operating system monopoly—and the network effects that drove sales of Office and their server products—irrelevant. They got a second smack upside the head when they lost on mobile.

Cisco got similarly lazy, assuming that their dominant positions in network and voice would be a license to print money, but if I don’t need a Cisco phone to make calls, and I can use Teams or Zoom to meet with people, why the hell would I pay thousands for Cisco hardware and hundreds per month per person for Webex and UCS?