Cisco, the network giant based in San Jose, California, is reportedly planning a significant restructuring of its business operations. According to sources familiar with the matter, this move aims to streamline its focus on high-growth areas and enhance overall efficiency.
With a current workforce totaling 84,900 employees as of fiscal 2023, Cisco is contemplating the extent of the layoffs, although specific figures have not yet been disclosed. An official announcement regarding this restructuring initiative is anticipated as early as next week, aligning with the company’s upcoming earnings call scheduled for February 14th.
This prospective restructuring follows a similar move announced by Cisco in November 2022 during an earnings call, which affected approximately 5% of its workforce. The previous restructuring incurred around $600 million in severance and related charges.
While Cisco declined to provide comments on the matter, the potential restructuring aligns with broader trends in the tech industry. Companies like Nokia and Ericsson have previously announced job cuts as part of their cost-saving measures.
The tech sector has recently witnessed several significant layoffs, with industry giants such as Amazon, Alphabet, and Microsoft implementing workforce reductions. Cisco’s decision comes amid challenges in its networking equipment segment, as evidenced by the company’s downward revision of full-year revenue and profit forecasts in its previous earnings call.
Cisco attributed the revenue and profit adjustments to a slowdown in orders during the first quarter, noting that customers are currently prioritizing installing and implementing products in their operational environments.
In addition to grappling with supply chain disruptions, Cisco has also faced a slowdown in demand following the pandemic. To adapt to the evolving market, the company has been increasingly focusing on expanding its software offerings, particularly in areas such as cybersecurity.
