Silicon Valley technology giant Cisco plans to lay off 5% of its global workforce – equating to approximately 4,250 workers – as the company continues to grapple with wavering demand for its products.
This sees Cisco join the ranks of other high-profile tech companies, like Google, Microsoft, and Amazon, that have also issued marching orders this year.
While big tech layoffs are nothing new, these recent actions made by Cisco send a clear signal that the sector is still a long way from making a comeback.
Cisco Struggles to Hit Revenue Targets
In what’s shaping up to be yet another challenging year for big tech businesses, internet networking company Cisco has announced it will be reducing its workforce by 5% in a desperate effort to recover costs.
This news comes three months after the California-based company projected a 6.6% annual revenue drop and a slight decrease in adjusted earnings per share. Cisco also reported that it would be lowering its annual revenue forecast to $51.5 billion to $52.5 billion from $53.8 billion to $55 billion, in response to a drop in demand for its products.
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Demand For Cisco Products Has Been Wavering
According to company CEO Charles Robbins, Cisco has been witnessing weak demand with its telecom and cable customers. The company is planning to switch to “high-growth areas” to recover costs, underscoring its decision to cut a large portion of the workforce.
“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.” – Cisco CEO, Charles Robbins
Robbins also cited its ongoing acquisition of software company Splunk as evidence of its plan to accelerate sales growth – a deal that is expected to be closed by the second financial quarter of this year.
Like most Silicon Valley companies, Cisco is also planning to safeguard its future with AI. This commitment was displayed in the recent extension of Cisco’s partnership with AI chip maker Nvidia, and the company’s joint mission to integrate Cisco’s Ethernet cables with Nvidia’s AI technology.
Cisco’s Total Layoff Casualty Count Almost Hits 10,000
Cisco’s latest round of cuts echoes an eerily similar action made in 2022, when the technology handed out pink slips to 5,000 workers ahead of its $28 billion acquisition of Splunk. The company justified the 2022 layoffs as part of a “rebalancing act”, and an effort they were taking to “rightsize” certain businesses.
Unfortunately for tech workers, serial layoffs aren’t unique to Cisco. As consumer demand continues to fluctuate, other major tech firms like Google and Amazon have recently issued multiple rounds of cuts – with Google reporting to have spent $700 million on layoffs this year alone.
These developments raise big tech’s layoffs to a total of 34,560 in 2024 according to layoff tracker layoffs.fyi, sparking concerns around job insecurity across the tech sector. However, while clerical roles face the biggest risk of being automated, as companies like Cisco place more of an emphasis on AI, greater demand is being created for candidates with AI skills.
With the labor market being notoriously unpredictable, it is uncertain how future trends will shape the employment landscape. But for workers looking to safeguard their future careers, upskilling yourself with AI skills is a great place to start.
