Cisco Systems Announces Significant Workforce Reductions
Cisco Systems, one of the world’s leading manufacturers of computer networking equipment, revealed on Wednesday its plans to reduce its workforce by 7 percent, marking the second major round of layoffs this year. The company has not disclosed the exact number of employees affected; however, with a reported total of 84,900 employees as of July 2023, this could result in approximately 6,000 job cuts. Earlier in February, Cisco had already laid off 4,000 employees as part of its restructuring efforts.
In its latest earnings report, Cisco reported a net income of $2.16 billion for the most recent quarter, reflecting a decline of 45 percent compared to the same period last year. The company’s revenue also dipped to $13.64 billion, a decrease of 10 percent year-over-year. Despite these declines, Cisco’s performance exceeded Wall Street’s expectations, leading to a nearly 6 percent increase in its stock price during after-hours trading.
Like many major technology firms, Cisco is striving to capitalize on the rapid industry shift toward artificial intelligence (AI). While Cisco has historically been one of Silicon Valley’s most prominent companies—and even held the title of the world’s most valuable publicly traded company during the dot-com boom—it has faced increased competition from businesses that specialize in cloud computing services aimed at large corporate clients.
Nevertheless, Cisco has consistently demonstrated profitability over the years. In March, the company completed its acquisition of cybersecurity and analytics firm Splunk for a substantial $28 billion.
In a statement released on Wednesday, Chuck Robbins, Cisco’s chairman and CEO, expressed the company’s intention to further integrate Splunk’s capabilities into its product offerings. Additionally, Cisco will consolidate its networking, security, and collaboration divisions into a single organization overseen by Jeetu Patel. Jonathan Davidson, who currently serves as the general manager and executive vice president of Cisco Networking, will transition to an advisory role under Mr. Robbins.
