The massive networking corporation Cisco Systems said on Wednesday that it would be laying off around 7% of its workers worldwide as it refocuses on high-growth industries like cybersecurity and artificial intelligence. This is the second significant round of layoffs at Cisco in 2024.
Cisco did not disclose the precise number of jobs that will be removed, but based on its stated 84,900 workers as of July 2023, the 7% cut may impact about 6,000 workers.
In February of last year, the business let go of 4,000 employees.
The employment losses coincide with Cisco announcing a 10% quarterly sales reduction to $13.64 billion year over year. Even still, this was more than the $13.54 billion that the market had anticipated.
“Cisco has announced a restructuring plan aimed at investing in key growth opportunities and enhancing business efficiencies,” the company stated in an SEC filing. Cisco anticipates pre-tax charges of up to $1 billion related to the restructuring, with $700-800 million expected to be recognized in the first quarter of fiscal 2025.
Despite the layoffs, CEO Chuck Robbins remains optimistic about the recovering demand for Cisco’s networking equipment. “Inventory digestion is complete, and we’re now returning to a more normalized demand environment,” Robbins informed analysts.
The company is shifting its focus to capitalize on emerging technologies, having pledged $1 billion in June to invest in AI startups. Cisco also recently acquired cybersecurity firm Splunk for $28 billion.
Cisco intends to merge its networking, security, and cooperation divisions into a single entity as part of the reorganization. Above analyst predictions, the business anticipates sales for the first quarter of 2013 between $13.65 billion and $13.85 billion.
