- Cisco will lay off 4,000 workers very soon
- Last quarter the company recorded a “record” growth of 12% in its revenues
- Investors seem happy with the revenue growth and future prospects.
Cisco has confirmed that it will lay off about 4,000 workers, representing 5% of its global workforce, as part of an ongoing restructuring effort to focus on artificial intelligence, silicon, optics and security.
The company’s CEO, Chuck Robbins, announced the plans in a post praising the company’s “record” revenue growth of 12% and declaring that “Our Path Forward” must include some job losses along the way.
Rather than being purely a cost-cutting exercise, or a response to AI-enhanced productivity that makes some human workers irrelevant, Robbins emphasized that the job cuts would drive a restructuring of the company, giving it the “focus, urgency and discipline” to address high-growth areas.
Cisco eliminates 4,000 jobs
The company added that it will continue to hire in high-growth areas such as artificial intelligence infrastructure, silicon development, fiber optic and fiber networks, cybersecurity and the internal deployment of artificial intelligence and automation, although 5% of its workers would be affected in this series of layoffs.
Cisco confirmed $15.84 billion in revenue, up 12% year over year in its results, but most notably, networking orders grew more than 50% and data center switching orders grew more than 40%. So far 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 Placement Services,” Robbins added, boasting that the program has had a 75% success rate in finding the next position.
Despite the considerable loss, investors seemed pleased with Cisco’s reaction to market trends and its restructuring effort 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 change from the pre-pandemic overhiring and AI-induced efficiency gains previously blamed, it is still disappointing news for the 108,000 tech workers affected this calendar year alone (via layoffs.fyi).
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