Cisco Systems Announces Layoffs
Job Cuts Impact 7% of Workforce
Company Focuses on Strategic Shift
Telecommunications giant Cisco Systems announced on Wednesday that it will lay off approximately 7% of its global workforce. This decision comes as the company undergoes a strategic shift, focusing on higher-growth areas such as software and services.
In a statement, Cisco CEO Chuck Robbins said, "These actions are necessary to accelerate our transformation and position Cisco for long-term growth." He added that the company is "committed to supporting affected employees during this transition."
According to Reuters, Cisco expects to record a pre-tax charge of approximately $1 billion related to the layoffs. These charges will primarily be for severance and employee benefits.
- Cisco employs approximately 83,000 people worldwide.
- The layoffs are expected to impact all regions and business units.
- Cisco's first-quarter revenue exceeded expectations, driven by strong demand for its networking products.
- This is the second round of job cuts announced by Cisco this year.
- Cisco previously laid off approximately 2,000 employees in February.
The layoffs come amidst a broader economic slowdown, with many companies announcing job cuts in recent months. According to a recent study by Challenger, Gray & Christmas, U.S. companies announced over 200,000 job cuts in the first half of 2023.
Cisco's decision to focus on software and services aligns with the growing trend towards cloud computing and digital transformation. By shedding non-core businesses and investing in high-growth areas, the company aims to maintain its competitive position in the rapidly evolving technology landscape.
The layoffs are expected to be completed by the end of Cisco's fiscal year 2024, which ends in July 2024. The company will provide more details on the layoffs during its upcoming earnings call on August 16, 2023.
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