Cisco cutting global workforce by 5%

  • Cisco has announced that will be reducing its workforce by 5 percent on the back of its latest earnings report.
  • The majority of the job cuts are expected during this current fiscal quarter, which runs until April.
  • The company announced a similar set of layoffs in 2022 as part of a restructuring decision.

The casualties of tech winter 2024 continue as Cisco is the latest company to announce mass layoffs.

While the company did not detail precise how many workers will be let go, it did note that its global workforce will be reduced by 5 percent during an earnings call this week for Q2 2024.

Using Mobile World Live‘s calculations, the company had an estimated 84 900 employees in last year, so the 5 percent figure would represent roughly 4 000 people losing their jobs.

At the time of writing it is unclear which divisions, or indeed which regions, will suffer losses, but Cisco did point out that the bulk of the cuts would happen during the current fiscal quarter, which comes to an end in April.

“This restructuring plan will impact approximately 5 percent of Cisco’s global workforce. Cisco currently estimates that it will recognize pre-tax charges to its GAAP financial results of approximately $800 million consisting of severance and other one-time termination benefits and other costs. These charges are primarily cash-based,” a summary of the earnings report explained.

“Cisco expects to take the majority of these actions in the third quarter of fiscal 2024 and recognize approximately $500 million of these charges. Cisco expects approximately $150 million of these charges to be recognized in the fourth quarter of fiscal 2024, and the remaining amount of these charges primarily through the first half of fiscal 2025,” it added.

This is not the first time that Cisco has announced layoffs of this size, reducing its workforce previously by 5 percent too in 2022, shortly after revealing its Q1 2023 financial results. Those layoffs were also part of a restructuring effort at the company.

As for why the restructuring is happening now, a worldwide slow down in spending has been cited by CEO Chuck Robbins.

“In terms of the macro environment, we are seeing a greater degree of caution and scrutiny of deals given the high level of uncertainty. As we’re hearing this from our customers, it’s leading us to be more cautious with our forecast and expectations,” he stated.

This higher degree of caution is likely something we are going to see from other big tech companies moving forward this year, so don’t expect this to be the last time mass layoffs of this nature are announced in 2024.


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