Cisco Systems, a global leader in networking and telecommunications equipment, is poised to undergo a major restructuring that will result in the dismissal of thousands of its employees. The move is part of Cisco’s strategic pivot towards sectors with higher growth potential, according to sources familiar with the plans.
This restructuring comes on the heels of a previous announcement made by Cisco in November 2022, where the company disclosed plans to restructure approximately 5% of its workforce during an earnings call. The initiative resulted in $600 million in severance and related expenses.
The decision to downsize the workforce aligns with recent actions taken by other technology firms, such as Nokia and Ericsson, who have also implemented workforce reductions as a cost-cutting measure.
Cisco’s decision to streamline its workforce comes amid a challenging business environment, as evidenced by the company’s recent earnings announcement. Cisco adjusted its revenue and profit expectations downward for the full year, citing a deceleration in demand for its networking products.
The company attributed this downturn to a decrease in orders during the first quarter, indicating that customers are currently focused on installing and implementing products in their environments rather than making new purchases.
The restructuring at Cisco underscores the dynamic nature of the technology industry and the need for companies to adapt to changing market conditions. As Cisco navigates this transition, the company remains committed to delivering innovative solutions and maintaining its position as a leader in the networking and telecommunications sector.