Cisco said it is cutting 5pc of its workforce to ‘realign the organisation’ and invest more in key priority areas, as tech layoffs continue to mount this year.
Cisco has announced plans to cut 5pc of its global workforce, or more than 4,000 jobs, as layoffs continue to mount in the tech sector.
The tech multinational said this restructuring plan aims to “realign the organisation” and enable Cisco to invest more in key priority areas. The company expects the majority of these layoffs to occur over the next three months – Cisco’s third fiscal quarter of 2024.
These layoffs are expected to cost Cisco roughly $800m from severance, termination benefits and “other costs”. Cisco expects to spend around $500m in its next fiscal quarter on this restructuring plan. Cisco employed nearly 85,000 staff worldwide by the end of July 2023.
The announcement comes amid Cisco’s second fiscal quarter results, which showed a decline in both revenue and net income compared to the same period last year. Despite this, Cisco CFO Scott Herren claims the company had “strong margins” and solid top and bottom-line results for the quarter.
“We are making good progress in our business model shift to more recurring revenue while remaining focused on financial discipline, operating leverage and shareholder returns,” Herren said.
Cisco was on a period of expansion last year, as it snapped up cybersecurity company Splunk in a deal valued at $28bn. Towards the end of 2023, Cisco shared plans to acquire Isovalent, a networking and security company with headquarters in California and Zurich. The deal is for an undisclosed sum but is expected to close in the third quarter of 2024.
Cisco’s layoffs could impact Irish jobs, as the company has offices in Dublin and Galway. Job losses in the tech sector appear to be mounting this year. Last month, PayPal announced plans to reduce its global workforce by 9pc to “right-size” its business and cut costs in the latest round of tech layoffs this year.
Other announcements of layoffs could lead to more Irish job losses this year. Tencent-owned Riot Games shared plans to cut 11pc of its workforce – 530 jobs globally – as part of adjustments to its business. Riot Games employs hundreds of staff in Dublin.
Digital printing company Xerox also announced it is cutting thousands of staff this quarter, as part of a “reinvention” strategy that could lead to Irish job losses.
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