Cisco announces it is laying off thousands of workers
AP
Synopsis
Cisco announces workforce reduction, affecting 5% of global employees or over 4,000 jobs. Layoffs in Silicon Valley may increase as industry shifts towards artificial intelligence. Tech layoffs in late 2022 and early 2023 were significant. Cisco reports revenue decrease. CEO emphasizes innovation for growth.
By The Feed
Last Updated:
Cisco announced on Wednesday that it will be reducing its workforce as part of a restructuring plan. The computer networking giant revealed that approximately 5 percent of its global employees or more than 4,000 jobs will be affected by the layoffs. This decision comes alongside the announcement of its latest quarterly earnings figures.
While these job cuts are significant, they do not match the scale of layoffs seen in late 2022 and early 2023. During that period, tech companies shed hundreds of thousands of jobs in response to the hiring spree during the pandemic, when companies rapidly expanded their workforces as daily life shifted online.
In a major move late last year, Cisco agreed to acquire cybersecurity company Splunk in a deal valued at $28 billion, marking its largest acquisition to date. This acquisition positions Cisco, traditionally known for routers and network equipment, as a key player in the cybersecurity market alongside competitors like Palo Alto Networks, Check Point, CrowdStrike, and Microsoft.
Despite these strategic moves, Cisco reported a 6 percent decrease in revenue, totaling $12.8 billion, for the fiscal quarter ending in late January compared to the same period the previous year. The company's profit also saw a decline of about 5 percent, amounting to $2.6 billion.
Chuck Robbins, CEO of Cisco, highlighted the company's focus on aligning investments with future growth opportunities. He emphasized the importance of innovation in an increasingly connected ecosystem, particularly as customers embrace AI and prioritize securing their organizations.
Following the release of the earnings figures, Cisco's shares experienced a more than 5 percent decline in after-market trading, settling at $47.65.
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According to its website, Cisco had nearly 85,000 employees at the end of last year. Analysts suggest that tech layoffs may become more common in Silicon Valley as the industry pivots towards artificial intelligence.While these job cuts are significant, they do not match the scale of layoffs seen in late 2022 and early 2023. During that period, tech companies shed hundreds of thousands of jobs in response to the hiring spree during the pandemic, when companies rapidly expanded their workforces as daily life shifted online.
In a major move late last year, Cisco agreed to acquire cybersecurity company Splunk in a deal valued at $28 billion, marking its largest acquisition to date. This acquisition positions Cisco, traditionally known for routers and network equipment, as a key player in the cybersecurity market alongside competitors like Palo Alto Networks, Check Point, CrowdStrike, and Microsoft.
Despite these strategic moves, Cisco reported a 6 percent decrease in revenue, totaling $12.8 billion, for the fiscal quarter ending in late January compared to the same period the previous year. The company's profit also saw a decline of about 5 percent, amounting to $2.6 billion.
Chuck Robbins, CEO of Cisco, highlighted the company's focus on aligning investments with future growth opportunities. He emphasized the importance of innovation in an increasingly connected ecosystem, particularly as customers embrace AI and prioritize securing their organizations.
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Following the release of the earnings figures, Cisco's shares experienced a more than 5 percent decline in after-market trading, settling at $47.65.
(You can now subscribe to our Economic Times WhatsApp channel)
