Cisco Job Cuts To Total ‘Thousands’ As Tech Giant Focuses on ‘High-Growth’ Areas: Report
The tech giant may be cutting ‘thousands’ of jobs as early as next week after its upcoming earnings call on February 14.
Cisco Systems is poised to lay off thousands of employees as the tech giant pivots to focus on “high-growth areas,” according to a report by Reuters published on Friday.
An announcement could come as early as next week, according to three sources familiar with the matter that Reuters cited. Cisco is expected to report Q2 2024 earnings on February 14.
Cisco did not respond to CRN’s request for comment on the potential job cuts before publication.
Cisco last year issued layoff notices to approximately 4,000 employees, or about 5 percent of its workforce across some of its biggest business segments as the company rolled out efforts to “rebalance” and maximize cost savings, in part by layoffs, but also by shrinking its real estate footprint of smaller office locations.
San Jose, Calif.-based Cisco has been focused on unifying its cybersecurity portfolio and boosting its market share in the security space.
During the company’s most recent fiscal quarter, Q1 2024, Cisco’s Security segment rose 4 percent quarter over quarter. Cisco’s Networking segment increased 10 percent year over year and the company’s Observability segment grew 21 percent quarter over quarter. At the same time, however, Cisco lowered its full-year 2024 sales outlook due to what the company referred to as a slowdown in new orders.
The CEO for a top Cisco partner, who did not want to be identified, said he sees the layoffs as a sign that Cisco is getting back to being a lean and mean sales-driven organization focused on high-growth areas like security and networking.
“Cisco made a massive investment of additional headcount including some reps that were more complacent,” he said. “I hope this means they are getting back to the grass roots style of selling and innovation.”
Cisco has a total employee count of 84,900 as of its fiscal 2023. The company has not yet filed a Worker Adjustment and Retraining Notification (WARN) notification yet regarding the reported incoming layoff round.
Brian Swisher, executive vice president of everything as a service for Advizex, a Fulcrum IT Partners company and a top Cisco partner, said he is not concerned about the layoffs impacting partners.
In fact, Swisher said he sees the layoffs as Cisco doubling down on partners as the networking leader sharpens its focus on high-growth areas.
“I see this as Cisco moving to drive higher growth working with partners around AI, networking and security,” he said. “Cisco is always restructuring to better support customers and partners. I see this as a vote of confidence in partners. This validates the investments that Advizex has been making in everything as a service with high growth solutions for customers, leaning into products and services from Cisco and Splunk.”
A top sales executive for a top partner, who did not want to be identified, said he sees the layoffs as Cisco trimming headcount on some big bets that haven’t paid off. “The cuts are going to come from stagnant areas,” he said. “This is Cisco focusing on the talent they need to ensure AI solutions are in the forefront for partners whether it is security, data center management, cloud or networking automation. They are going to hire in growth areas like security and managed services.”
A top sales executive for another CRN SP500 company, who did not want to be identified, said he sees the layoffs as a “great opportunity “for fast growing partners to pick up hot talent. “This is a good opportunity for us to pick up folks with strong technical skills or sales relationships,” he said.
Steve Burke contributed to this report.