Cisco to lay off one-fifth of staff - reports

Reports suggest Cisco is preparing for a more software-defined future

Networking equipment giant Cisco is planning to lay off as many as 14,000 staff, or around one-fifth of its global workforce, according to reports.

The reasons cited include the company requiring "different skill sets" as the networking market shifts towards a more "software-defined future", according to Computer Reseller News, citing the usual "sources close to the company".

"They need different skill sets for the software-defined future than they used to have," claimed the source. They continued: "In theory the addressable market could be higher and margins richer, but it will take some time to make this transition."

Analysts have also suggested that the shift towards cloud computing is also changing the networking equipment market, with cloud providers requiring ultra-high-end networking devices to handle the volumes of data with the performance that customers need, on the one hand, while demand from corporates for data centre networking products is levelling off.

The announcement of job losses at Cisco could be made later today as the company announces its fourth quarter and full-year results.

In recent years, Cisco has invested in software tools, such as data analytics and cloud-based tools for managing data centres, as well as lashing out $1.4bn for Internet of Things management platform Jasper in February this year.

Cisco has a record of announcing lay-offs at the end of its financial years, with more modest job cuts announced in both August 2013 and August 2014. It also announced cuts to its workforce in July 2011 and July 2012.

Despite these announcements of job cuts, the company's overall headcount remained more or less the same between 2010 and 2015, dipping significantly in 2012, only to bounce back up in 2013.

The company, which enjoys a market value of more than $150bn, hasn't commented on the reports, but will be announcing its financial results at 9.30pm BST.