Cisco: significant job cuts likely
Company reportedly set to announce layoffs on its earnings call this week
Network infrastructure giant Cisco is gearing up for a significant business restructuring aimed at prioritising high-growth sectors.
Reports suggest that this strategic shift will involve the laying off of thousands of employees.
According to data available on its website, Cisco's current workforce stands at 84,900 employees as of fiscal year 2023.
Sources familiar with the matter indicate that Cisco is in the process of finalising the number of employees affected by the impending layoffs. An official announcement regarding these redundancies could be made as soon as next week, coinciding with the company's earnings call scheduled for 14th February.
This restructuring follows a similar initiative disclosed by Cisco during an earnings call in November 2022, which resulted in approximately 5% of its workforce being impacted, with associated charges totalling $600 million.
This move aligns with a broader trend observed within the tech industry, where companies like Nokia and Ericsson have undertaken significant job cuts in the previous year to streamline costs. Additionally, several prominent tech firms, including Amazon, Alphabet and Microsoft, have recently announced job cuts in a pivot to AI.
In all, technology companies have already shed 34,000 jobs in 2024 according to calculations by the FT.
Cisco's decision comes in the wake of a downward revision of its full-year revenue and profit forecasts during a previous earnings call. This revision was attributed to a slowdown in demand for its networking equipment, with customers prioritising the installation and implementation of products in their environments.
In response to ongoing challenges such as supply chain disruptions and a post-pandemic deceleration in demand, Cisco has been accelerating its transition towards software offerings, particularly in areas such as cybersecurity.
Cisco is also awaiting a decision by the European Commission, expected in March, over whether its plans to acquire Splunk break antitrust rules.