Networking giant Cisco Systems is reportedly planning to lay off approximately 14,000 employees, with the job cuts standing to be the company’s single largest layoff in its 32-year history.
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Sources told CRN that the company has already offered early retirement package plans to employees.
Cisco Systems is reportedly considering shedding its global workforce by almost 20 percent with the lose of up to 14,000 jobs.
Cisco made the job-cut announcement as part of its fiscal fourth-quarter earnings report. According to the report published on CRN, the total addressable market for the software side is significantly higher than that of the hardware market.
Cisco slightly beat analysts estimates with a quarterly profit of $2.8 billion, or 63 cents a share, on revenue of $12.64 billion.
Chief Executive Chuck Robbins, who took over from John Chambers in July a year ago, has been steering the company toward more software and services businesses.
Cisco Systems (CSCO) late Wednesday confirmed that it would ax thousands of jobs and reported Q4 earnings that topped views, though revenue declined 2% amid weakness in China.
“They need different skill sets for the software-defined future than they used to have”, said one source to CRN who asked not to be named.
In February Cisco announced plans for a $1.4 billion acquisition of Jasper Technologies, which developed an internet of things (IoT) cloud platform. He said Cisco would increase investments in growth areas.
Robbins said Cisco’s job cuts are not related to its budding partnership with Sweden-based Ericsson (ERIC). Its second-largest division, routing, suffered a 5 per cent drop in sales to US$1.89 billion, the company said. Security, which Robbins said was the top priority of all its customers, posted a revenue gain of 16 percent in the quarter.
Cisco chief financial officer Kelly Kramer assured analysts on an earnings call that the company was not giving up on the bones of the internet such as routers and switches.
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Overall in Silicon Valley, Chowdhry wrote, “this will result in massive 369,000 layoffs in the tech sector this year alone”.
