American network equipment giant Cisco is preparing to downsize by letting go “thousands” of employees, according to a Reuters report that cited unnamed sources. With its latest cost-cutting measure, the company seeks to restructure its business and prioritize high-growth areas.
Though the exact number of affected employees remains under wraps, it is noteworthy that the San Jose- headquartered company currently employs around 84,900 employees. Additionally, there has been no official confirmation from the company on the latest report but an official announcement could be made as early as this week, coinciding with their upcoming earnings call on February 14th. The company last downsized its workforce in November 2022, impacting roughly 5% of its workforce, costing $600 million in severance and related charges.
Meanwhile, the report further highlighted that Cisco’s revised financial projections suggest a decline in the demand for its core networking equipment. Beyond pandemic-related supply chain issues, Cisco has grappled with a post-pandemic slowdown in demand, prompting them to accelerate their transition towards software offerings, particularly in cybersecurity. This strategic shift likely fuels the upcoming restructuring, with targeted layoffs potentially aiming to streamline operations and reallocate resources towards these growth areas.
However, the news raises concerns about the impact on employees and potentially dampens overall industry sentiment. While Cisco navigates this challenging period, the coming weeks will reveal the specific details of the expected layoffs and their broader implications for both the company and the tech sector as a whole.
Meanwhile, the move resonates with the broader layoff trend, especially in the tech industry. Giants like Amazon, Google, and Meta have announced workforce reductions, citing economic slowdowns and the need to adapt to changing market conditions.
Elsewhere, just at the start of the fresh week, cash-strapped Indian budget airline SpiceJet has reportedly announced to let go of 1,400 employees, downsizing a staggering 15% of its workforce. While the move aims to stem financial losses and regain investor confidence, it resonates with the broader industry mood.
