- Cisco will soon lay off 4,000 employees
- Last quarter, the company had a “record” growth of 12% in revenue
- Investors appear to be satisfied with revenue growth and future prospects
Cisco has confirmed that it will lay off around 4,000 employees, representing 5% of its global workforce, as part of an ongoing restructuring effort to focus on artificial intelligence, silicon, optics and security.
Company CEO Chuck Robbins announced the plans in a post in which he praised the company’s “record” revenue growth of 12%, and stated that “Our path forward” must include some job losses along the way.
Rather than being solely a cost-cutting exercise or a response to AI-enhanced productivity that makes some human workers irrelevant, Robbins emphasized that the job cuts would fuel a corporate restructuring, giving it the “focus, urgency and discipline” to tackle high-growth areas.
Cisco cuts 4,000 jobs
The company added that it will continue to hire in high-growth areas such as AI infrastructure, silicon development, optics and fiber networks, cybersecurity and the internal deployment of AI and automation, although 5% of its employees would be affected by this series of layoffs.
Cisco confirmed $15.84 billion in revenue, a 12% year-over-year increase in its results – but most notably, network orders increased by more than 50% and data center switching orders increased by more than 40%. To date this fiscal year, Cisco has also secured $5.3 billion in AI infrastructure orders from hyperscalers.
“We will provide support in finding new opportunities, whether internal or external, through Cisco’s placement services,” added Robbins, boasting that the program has achieved a 75% next role discovery success rate.
Despite the significant loss, investors seemed pleased with Cisco’s response to market trends and its restructuring efforts to focus on high-growth areas, with shares up more than 20% since yesterday’s announcement.
It’s also a trend we’re seeing across the industry, with companies like Meta, IBM and Salesforce also blaming layoffs on shifting priorities. While this is a shift from previously blamed pre-pandemic overhiring and AI-induced efficiency gains, it’s still disappointing news for the 108,000 tech workers affected this calendar year alone (via layoffs.fyi).
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