Cisco plans to lay off thousands of employees as it shifts focus towards high-growth areas

Cisco, the network giant, is planning a business restructuring that will involve thousands of layoffs as the company shifts focus towards high-growth sectors, according to three sources close to the situation.

Cisco currently employs 84,900 people as per their fiscal 2023 data listed on their website. The final number of employees to be included in the layoff is still under consideration, one source mentioned.

Cisco could announce the layoffs as early as next week, in preparation for its earnings call on February 14. In November 2022, during a previous earnings call, Cisco announced a restructuring that affected about 5% of its workforce. This led to $600 million in severance and other charges.

The company declined to comment on the current restructuring plans. This decision comes amidst a time when several tech companies, including telecom manufacturers Nokia and Ericsson, eliminated thousands of positions last year to reduce costs.

Over the recent weeks, notable tech companies like Amazon, Alphabet, and Microsoft have also implemented layoffs. In its previous earnings call, Cisco had lowered its full-year revenue and profit predictions, indicating a deceleration in demand for its networking equipment.

The company attributed this weakness to a slump in orders in the first quarter, stating that “customers are currently focused on installing and implementing products in their environments.”

In recent years, Cisco has been struggling with supply chain disruptions and a decrease in demand following the pandemic. This has accelerated its transition towards software solutions, particularly in cybersecurity.