According to three sources with knowledge of the matter, network giant Cisco is preparing to restructure its operations and cut thousands of jobs to concentrate on high-growth sectors. The company, based in San Jose, California, currently has 84,900 employees as of fiscal 2023. Details about the exact number of employees to be affected by the layoffs are still being finalized. An official announcement is expected to be made around the time of the company’s earnings call on Feb. 14. In November 2022, Cisco announced a restructuring that impacted approximately 5% of its workforce, resulting in $600 million in severance and other charges. Cisco has declined to provide any comments on the matter. This move follows a trend in the tech industry, as companies like Nokia and Ericsson reduced their workforce last year to cut costs. Additionally, tech giants such as Amazon, Alphabet, and Microsoft have also initiated layoffs recently. Cisco had previously lowered its full-year revenue and profit forecasts in its earnings call, citing a slowdown in demand for its networking equipment. The company attributed this weakness to a decrease in orders in the first quarter, with customers focusing on product installation and implementation in their environments. Cisco has faced challenges with its supply chain and experienced a post-pandemic slowdown in demand, prompting the company to accelerate its focus on software offerings such as cybersecurity. (Reporting by Utkarsh Shetti in Bengaluru and Supantha Mukherjee in Stockholm; Editing by Chris Reese)
