Dive Brief:
- Cisco plans to lay off 5% of its workforce as part of a restructuring plan, the company said Wednesday in an SEC filing. Based on the company’s most recent headcount of 84,900, the cuts will impact roughly 4,200 employees globally.
- The decision to align expenses and investments to the current environment as customers "absorb high levels of product inventory," a company spokesperson said in an email Thursday.
- Cisco reported a revenue drop during the second quarter of its 2024 fiscal year, according to a Wednesday earnings call, for the period ending Jan. 27. The company posted $12.8 billion in global revenue, down 6% year over year.
Dive Insight:
Cisco's workforce trim adds another name to the running list of providers laying off workers in the first quarter of the year.
SAP announced a restructuring program to focus resources behind AI, the company said in January. The plan will impact up to 8,000 roles, though the company expects to reskill or buy out most of those workers.
Xerox also announced a plan to restructure its operations around digital services in January, impacting about 15% of its workforce. Large providers including Google, Microsoft and Amazon have also made cuts across specific divisions.
"Similar to 2023, we have seen most major tech companies layoff thousands of employees as companies look to trim down costs and focus on profitability," said Joe Brunetto, analyst at global research firm Third Bridge, in an email. "Not surprisingly, Cisco is cutting 5% of their global workforce as part of a restructuring to focus on high-growth areas such as Al and software.”
Nearly 40,000 workers in tech have been laid off globally since the start of the year, according to self-reported layoff tracking site Layoffs.fyi. The first quarter of 2023 brought about more than 167,000 layoffs at 585 companies, according to the site.
News of layoffs at Cisco come as the provider is working toward the regulatory approval of its $28-billion acquisition of Splunk, a security observability firm.
