Cisco to Cut Thousands of Jobs in Restructuring Plan
Network Giant Cisco Planning Major Restructuring
Cisco, a network giant, is planning a significant business restructuring that will involve laying off thousands of employees, as it aims to focus on high-growth areas. This move comes in the wake of the company’s efforts to realign its business strategy and adapt to changing market dynamics.
Employee Count and Decision-Making Process
The San Jose, California-based company currently has a total employee count of 84,900 as of fiscal 2023, according to its website. As the company deliberates on the total number of employees to be affected by the layoffs, there is anticipation surrounding the potential impact on the workforce and the overall organizational structure.
Upcoming Announcement and Previous Restructuring
An official announcement regarding the restructuring could come as early as next week, coinciding with the company’s earnings call on Feb. 14. This comes in the wake of a previous restructuring announced by Cisco during an earnings call in November 2022, which impacted roughly 5% of its workforce and resulted in $600 million in severance and other charges.
Industry Trend and Cisco’s Position
The move by Cisco reflects a broader trend in the tech industry, with companies like Nokia and Ericsson also cutting thousands of jobs last year to reduce costs. Additionally, major tech firms such as Amazon, Alphabet, and Microsoft have implemented layoffs in recent weeks, highlighting the evolving landscape of the industry.
Challenges Faced by Cisco
Cisco had previously cut its full-year revenue and profit forecasts in its earnings call, indicating a slowdown in demand for its networking equipment. The company attributed this weakness to a slowdown in orders and customers’ focus on installing and implementing products in their environments. Moreover, Cisco has been grappling with supply chain issues and a post-pandemic slowdown in demand, prompting its increased focus on software offerings like cybersecurity.
The restructuring at Cisco signifies a strategic shift aimed at driving growth and adapting to market dynamics, as the company navigates through a period of transformation and industry-wide changes.
