Cisco Systems is cutting its workforce by 5,500 employees to keep up with a rapidly changing tech sector that has less demand for the routers and switches that brought the company to prominence over 30 years ago.
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Shifting its focus away from hardware, Cisco (NASDAQ:CSCO) is reportedly laying off upward of 14,000 employees, representing almost 20% of the networking giant’s global workforce.
According to a regulatory filing from April, Cisco now has more than 73,000 employees operating worldwide.
CRN says Cisco, which is set to announced its fourth quarter fiscal results tomorrow, will announce the job cuts “within the next few weeks”.
Ever since the arrival of a fresh outlook in the form of CEO Chuck Robbins in 2015, the company has been working to boost its enterprise software-based networking, security and management services. Cisco will report fiscal fourth quarter earnings on Wednesday after the close in NY.
Analysts project a 2 per cent decline in sales to $US12.6billion. If it does take place, this layoff would be the largest in Cisco’s 32-year history. In August 2013, Cisco dismissed 4,000 employees.
Apart from Cisco, two other big software companies, Microsoft Corp and HP Inc, have also announced job cuts this year.
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The San Jose-based company has reportedly ran out of all avenues of early retirement package plans to its 73,104 employees worldwide and the decision that was foreseen by analysts as early as in January this year did not come over the night but was brewing over a long period, said a CRN report quoting sources. Cisco has shown its appetite for software with recent acquisitions, such as Jasper Technologies, which makes programs that let companies connect all manner of electronic devices. It groups its products and technologies into the various categories such as Switching Next-Generation Network (NGN) Routing Collaboration Service Provider Video Data Center Wireless Security and Other Products.
