Cisco Systems, known for its widely used networking products, is undergoing a significant workforce reduction, with over 4,000 employees set to depart. With a total workforce of 84,900, this represents about 5% of the company’s total employee count.
The last major workforce cutback from Cisco came by the end of 2022 when it said goodbye to 5,000 workers right before acquiring Splunk for $28 billion. This deal is now expected to be finalized by April 30 this year, according to the company’s management. Cisco expects this reorganization to cost around $800 million.
The occurrence of two substantial layoffs within two years has reverberated across other major technology firms, including Google and Amazon. Both companies, which previously maintained steadily expanding workforces, have undergone multiple rounds of workforce reductions since the conclusion of 2022.
The mass layoffs announced by Cisco align with a broader trend observed across the technology sector, which has contributed to enhanced profitability and stock performance for companies while highlighting the prevailing job insecurity within an industry increasingly embracing artificial intelligence (AI).
Despite remaining lucrative entities, these reductions are underway across most companies. Cisco, headquartered in San Jose, California, reported earnings of $2.6 billion, equating to 65 cents per share, during its fiscal second quarter spanning October to January. This marked a 5% decline from the corresponding period in the previous year. Additionally, revenue for the period experienced a 6% decrease compared to the prior year, amounting to $12.8 billion.
However, during a conference call with analysts on Wednesday, Cisco CEO Chuck Robbins outlined the company’s expectations for sluggish demand for its products and software services over the next three to six months. This caution stems from customers exercising “a greater degree of caution” amidst an uncertain economic outlook, as highlighted by Robbins.
