On Wednesday, networking giant Cisco Systems revealed its intention to cut about 7% of its global workforce as it shifts
its focus towards high-growth sectors such as artificial intelligence and cybersecurity. This move represents Cisco’s
second major round of layoffs in 2024. Although Cisco did not provide a precise number of positions being eliminated, the
7% reduction could impact approximately 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 remained optimistic about the resurgence in demand for Cisco’s networking
equipment. “Inventory digestion is complete, and we’re now seeing a return to a more normalized demand environment,”
Robbins told analysts.
The company is focusing on emerging technologies, having invested $1 billion in AI startups in June and recently
acquiring cybersecurity firm Splunk for $28 billion. As part of its restructuring, Cisco plans to merge its networking,
security, and collaboration departments into a single entity. The company anticipates first-quarter revenue to range
between $13.65 billion and $13.85 billion, exceeding analyst expectations.
Massive lay offs but CISCO insists it is a sign of progress
