Cisco’s latest round of layoffs will impact approximately 4,150 employees, which is about 5% of its total workforce. As of July 2023, the company had around 83,000 employees worldwide.
This marks the second major job cut for Cisco this year. In February, the company laid off an even larger number of workers, cutting around 5,000 jobs. The current layoffs, while still significant, are not as extensive as the previous round.
As SFgate reports, these workforce reductions are part of Cisco’s ongoing efforts to restructure the company and shift its focus towards emerging technologies. By streamlining its operations and reallocating resources, Cisco aims to better position itself for future growth and innovation in key areas such as AI, cloud computing, and cybersecurity.
Shift in Focus and Impact on Yearly Profit
Cisco is making a strategic shift towards key areas of technology, including AI, cloud, and cybersecurity. The company believes these sectors will drive its future growth and innovation. It is important to note that this move comes as Cisco reports a yearly profit of $10.3 billion for fiscal 2024, an 18% decrease compared to the previous year but a massive profit nonetheless, leading some to speculate that these layoffs are purely driven by greed.
English.news.cn points out that the company’s revenue also took a hit, standing at $53.8 billion, a 6% decrease from the prior fiscal year. Despite these challenges, Cisco remains committed to its long-term strategy. The acquisition of Splunk, a leading data analytics firm, is a significant step in this direction.
CEO Chuck Robbins stated, “We are focused on executing our strategy and investing in the areas that will drive our future growth. While the decisions we’ve made are difficult, they are necessary to position Cisco for success in the years ahead.”
Splunk Acquisition and Operational Efficiency
Cisco’s acquisition of Splunk, a leading data analytics firm, had a negative impact on the company’s earnings per share (EPS) in the fourth quarter of fiscal 2024. The acquisition reduced GAAP EPS by $0.16 and Non-GAAP EPS by $0.04. However, this strategic move is expected to enhance Cisco’s capabilities in data analytics and cybersecurity, driving future growth and innovation.
To improve operational efficiency and enhance product offerings, Cisco has consolidated its networking, security, and collaboration teams into one organization. This restructuring will enable the company to better respond to customer needs and stay competitive in the market. By streamlining its operations, Cisco aims to optimize its resources and focus on delivering cutting-edge solutions in key areas of technology.
Support for Impacted Employees and Investment in Emerging Technologies
Cisco has announced that it will provide support measures to the employees affected by the layoffs. These measures include severance packages and outplacement services to help them transition to new opportunities. While the exact cost of these support measures has not been disclosed, they are expected to have an impact on the company’s overall cost structure.
Despite the layoffs, Cisco remains committed to investing in emerging technologies such as AI, cloud, and cybersecurity. These areas align with the company’s long-term goals and industry trends, and are expected to drive future growth and innovation. By focusing on these key areas, Cisco aims to stay competitive in the market and meet the evolving needs of its customers.
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