Networking giant Cisco Systems announced plans on Wednesday to lay off approximately 7% of its global workforce as the company shifts focus towards high-growth areas like artificial intelligence and cybersecurity. This marks Cisco’s second major round of job cuts in 2024.
While Cisco did not specify the exact number of positions to be eliminated, the 7% reduction could affect around 6,000 employees based on its reported workforce of 84,900 as of July 2023.The company previously laid off 4,000 workers in February.
The job cuts come as Cisco reported a 10% year-over-year decline in quarterly revenue to $13.64 billion. However, this still exceeded market expectations of $13.54 billion.
“Cisco announced a restructuring plan to allow it to invest in key growth opportunities and drive more efficiencies in its business,” the company stated in an SEC filing. Cisco expects to recognize pre-tax charges of up to $1 billion related to the restructuring, with $700-800 million being recognized in the first quarter of fiscal 2025.
Despite the layoffs, CEO Chuck Robbins expressed optimism about rebounding demand for Cisco’s networking equipment. “Inventory digestion is complete and we’re now returning to a more normalised demand environment,” Robbins told analysts.
The company is pivoting to capitalise on emerging technologies, having committed $1 billion in June to invest in AI startups. Cisco also recently acquired cybersecurity firm Splunk for $28 billion.
As part of the restructuring, Cisco plans to combine its networking, security and collaboration departments into a single organisation. The company forecasts first-quarter revenue between $13.65 billion and $13.85 billion, above analyst projections.
While Cisco did not specify the exact number of positions to be eliminated, the 7% reduction could affect around 6,000 employees based on its reported workforce of 84,900 as of July 2023.The company previously laid off 4,000 workers in February.
The job cuts come as Cisco reported a 10% year-over-year decline in quarterly revenue to $13.64 billion. However, this still exceeded market expectations of $13.54 billion.
“Cisco announced a restructuring plan to allow it to invest in key growth opportunities and drive more efficiencies in its business,” the company stated in an SEC filing. Cisco expects to recognize pre-tax charges of up to $1 billion related to the restructuring, with $700-800 million being recognized in the first quarter of fiscal 2025.
Despite the layoffs, CEO Chuck Robbins expressed optimism about rebounding demand for Cisco’s networking equipment. “Inventory digestion is complete and we’re now returning to a more normalised demand environment,” Robbins told analysts.
The company is pivoting to capitalise on emerging technologies, having committed $1 billion in June to invest in AI startups. Cisco also recently acquired cybersecurity firm Splunk for $28 billion.
As part of the restructuring, Cisco plans to combine its networking, security and collaboration departments into a single organisation. The company forecasts first-quarter revenue between $13.65 billion and $13.85 billion, above analyst projections.
