Tech News Summary:
- Cisco is planning to restructure its business and lay off thousands of employees to focus on high-growth areas.
- The company previously announced a restructuring that affected approximately 5% of its workforce, resulting in $600 million in severance and other charges.
- Cisco had cut its full-year revenue and profit forecasts in its previous earnings call, attributing the weakness to a slowdown in orders and a post-pandemic slowdown in demand.
In a strategic shift aimed at streamlining the company for future growth, Cisco Systems, Inc. has announced that it will be cutting thousands of jobs in the coming months.
The tech giant, known for its networking and communications equipment, plans to restructure its operations to focus on its most profitable and high-growth areas. As part of this restructuring, Cisco will be reducing its global workforce by approximately 6% or around 7,000 jobs.
The decision to cut jobs comes as Cisco aims to reallocate resources to its key growth areas, such as cloud computing, cybersecurity, and software-defined networking. The company also plans to invest heavily in its subscription-based software and services offerings, which have seen strong demand in recent years.
In a statement, Cisco CEO Chuck Robbins emphasized the company’s commitment to driving long-term growth and innovation. “We are making critical decisions to achieve long-term, sustainable growth, and to be a leader in the transition to the cloud and software-defined networking,” he said.
The restructuring is expected to result in an estimated $900 million in pretax charges, with the majority of the costs incurred in the first quarter of fiscal year 2023. The company expects these changes to position Cisco for future success and improved profitability.
While the news of job cuts is undoubtedly a difficult one for affected employees, Cisco has stated that it will provide support, including severance packages and outplacement services, to help ease the transition for affected workers.
Despite the job cuts, Cisco remains committed to its vision for the future and is optimistic about its ability to drive growth as it continues to adapt to the rapidly evolving technology landscape.