Cisco Announces Restructuring Plan, Includes Significant Layoffs
- Cisco, a leading network technology corporation, is undergoing a restructuring effort to refocus on high-growth areas, which will involve significant layoffs.
- The exact number of employees affected by the layoffs is still being determined, with an official announcement expected around Cisco’s upcoming earnings call.
- This restructuring follows a similar initiative in November 2022, which impacted approximately 5% of Cisco’s workforce and incurred significant costs.
- The decision to restructure comes amidst a broader trend within the tech industry, with companies like Nokia and Ericsson also announcing layoffs.
- Cisco’s strategic shift reflects challenges such as a slowdown in demand for networking equipment, prompting a focus on software offerings like cybersecurity.
Network technology corporation Cisco is in the process of restructuring its operations, a move that will involve laying off a significant number of employees. According to three sources familiar with the matter, the San Jose, California-based company is aiming to refocus its efforts on high-growth areas.
As of fiscal year 2023, Cisco has a total of 84,900 employees, as stated on its website. The exact number of employees to be affected by the upcoming layoffs is still under consideration, with one source indicating that the company has yet to finalize this figure.
An official announcement regarding the restructuring and layoffs could be made as early as next week, coinciding with Cisco’s scheduled earnings call on February 14th. This strategic decision follows a similar move made by the company in November 2022, during which it announced a restructuring effort impacting approximately 5% of its workforce. This previous restructuring incurred costs amounting to $600 million in severance and other related charges.
When approached for comment, Cisco declined to provide any official statement on the matter. The proposed restructuring comes amidst a broader trend within the tech industry, with companies such as Nokia and Ericsson having announced significant layoffs in the previous year as part of cost-cutting measures.
Notably, several prominent tech companies, including Amazon, Alphabet, and Microsoft, have also recently implemented layoffs within their respective organizations. Cisco’s decision to restructure comes in the wake of a downward revision of its full-year revenue and profit forecasts during its previous earnings call. This downward adjustment was attributed to a slowdown in demand for its networking equipment.
Cisco cited a decline in orders during the first quarter, noting that customers were primarily focused on installing and implementing products within their existing environments. Additionally, the company has been grappling with supply chain disruptions and a post-pandemic slowdown in demand, prompting a strategic shift towards software offerings such as cybersecurity.
In summary, Cisco’s plan to restructure its business operations and lay off employees reflects its strategic imperative to adapt to changing market dynamics and focus on high-growth areas within the technology sector.