Cisco has revealed plans to cut 5% of its global workforce, translating to around 4,250 jobs, as it continues to battle with a challenging economy.
The news sent Cisco shares dropping by around 9%, underlining the challenges faced by tech companies globally as the world’s economies continue to recuperate following the pandemic.
The alert came as the company announced its most recent quarterly earnings, which saw revenue drop 6% year-on-year to $12.8 billion.
Cisco announces job cuts
The company’s CFO, Scott Herren, summarized the report: “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, as evidenced by our increased dividend.”
CEO Chuck Robbins added: “We continue to align our investments to future growth opportunities.”
Cisco has been reasonably reactive to market trends in recent years, laying off a similar number of workers (4,100, or 5%) in November 2022. A further 350 went last September.
However, the 5% adjustment in headcount is fairly modest compared with some other companies that have been targeting 10% or more.
Other companies, like Okta, Zoom and DocuSign, have also cut headcounts this month, bringing February’s total to nearly 8,000. More than 23,000 workers had been made redundant during the same two-week period of 2023.
The company expects to incur around $800 million in charges associated with its February 2024 layoffs, which will mainly relate to severance and other termination payouts.
Via CNBC
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