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2024

Laying off thousands of employees due to poor equipment sales

On August 9, 2024, it became known that Cisco intends to carry out a restructuring, during which thousands of employees will be laid off. This measure is designed to reduce costs and improve financial performance against the background of poor sales of network equipment.

As of July 2023, Cisco employed about 84,900 people. Reuters According to reports, as part of the reorganization, approximately 4,000 workers "or slightly more" will be reduced. Thus, the global headcount will be reduced by 4.7-5%.

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Bloomberg

Cisco itself confirmed the mass layoffs, saying that it plans to cut about 7% of employees globally. Thus, up to 6,000 people around the world will lose their jobs. The corporation noted that the cost of reducing the number of personnel will reach $1 billion: these are monetary compensation, one-time severance pay and other costs. From $700 million to $800 million of the indicated amount will be for the period from August to October 2024.

Cisco CEO Chuck Robbins notes that his company is "investing hundreds of millions of dollars in artificial intelligence," including cloud solutions, infrastructure products, chips and cybersecurity. This course of development is one of the reasons for the mass layoffs.

These are significant changes, but we see that the market is moving so quickly [towards AI] that we must reorganize, "said Robbins, quoted by the CRN resource.

In turn, Scott Herren, Cisco's executive vice president and CFO, said that restructuring and reducing the number of employees are aimed primarily at "achieving efficiency throughout the company": this will allow more resources to be directed to the fastest growing areas.^[1]

Laying off thousands of employees

On February 9, 2024, it became known that the American manufacturer of network equipment Cisco is reorganizing, providing for a large-scale reduction in staff. Thousands of employees will lose their jobs, and the company itself intends to focus on developing the fastest growing areas.

On February 14, 2024, Cisco clarified that 5% of the staff would fall under the reduction, as a result of which about 4,250 employees could lose their jobs.

As of fiscal 2023, Cisco has a total workforce of 84,900. It is noted that as part of the restructuring, the corporation is focused on unifying its range of solutions in the field cyber security and increasing its share in the corresponding segment of the world market. Changes in the business model are intended, among other things, to help improve financial performance and optimize business operations in a difficult macroeconomic environment.

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Cisco

The CEO of a major Cisco partner, who asked to remain anonymous, said he saw the downsizing as a sign that "Cisco is once again becoming a frugal and sales-focused organization." According to him, the corporation will focus on security tools and network technologies. At the same time, Brian Swisher, executive vice president of Advizex, a subsidiary of Fulcrum IT Partners and one of Cisco's partners, notes that he assesses the reorganization of Cisco as a transition to faster growth. According to him, Cisco is constantly implementing organizational changes in order to "better support customers and partners."

On the other hand, a top sales manager for another Cisco partner, who wished to remain anonymous, said he viewed the layoffs as a necessary measure related to the fact that some major Cisco projects did not meet expectations. Reducing personnel in such teams will free up resources for promising areas.^[2]

2022: Massive staff cuts

On November 17, 2022, Cisco announced plans to reorganize its staff. In financial documents, the company noted that a total of $600 million is planned to be spent on the reshuffle, with half of these expenses in the fourth quarter of 2022.

The restructuring will include reshuffles, layoffs and hiring of new employees, as well as a reduction in the property portfolio to reflect the increase in mixed work. A spokesman said about 5% of employees would be affected by the plan. As of July 30, 2022, the company had about 83,300 full-time employees, meaning about 4,100 people would lose their jobs.

Cisco began to massively lay off employees

However, a company spokesman noted that Cisco will hire employees in other positions and expects to end fiscal 2022 with about the same number of employees as at the beginning of the year.

{{quote'This decision was not taken lightly and we will do everything we can to provide support to those affected, including generous severance pay, employment services and other benefits where possible, a spokesman said. Employment assistance will include everything we can do to help affected employees fill other open vacancies in the company, the spokesman added. }} Cisco similarly implemented a mid-2020 restructuring plan that included a significant number of layoffs. While a company spokesman declined to say which departments will be hit hardest this time around, Chief Financial Officer Scott Herren and CEO Chuck Robbins said in an earnings call that the company intends to dedicate more resources to corporate networks, platforms, security systems and cloud products.

Herren urged analysts not to think of it as action to reduce headcount motivated by cost savings. It's really rebalancing. He added that in the ideal case, the company could simply transfer employees from one area to another, but the reality is that to one degree or another there will be a mismatch of qualifications.^[3]

2020

Ex-programmer Cisco sentenced to 2 years in prison for deleting 16 thousand VKS service accounts

In mid-December 2020, the former Cisco engineer was sentenced to 2 years in prison for unauthorized access to the Cisco network, as well as the removal of 16 thousand accounts of the Cisco Webex Teams VKS service. According to the investigation, the ex-employee of the company committed a crime shortly after his dismissal. Read more here.

Plan to save $1 billion a year

In mid-August 2020, Cisco announced a plan to cut annual costs by $1 billion, which will lead not only to layoffs, but also to the tech giant's exit from unprofitable IT markets. Cisco CEO Chuck Robbins told investors that the company is moving to a service model, since it is the one that is most profitable in the post-pandemic world.

The cost restructuring plan includes a voluntary early retirement program that will include various lump sum payments of about $900 million.

Cisco fires people every year - usually in August. While the cuts are likely to be somewhat higher this time around, "said one Cisco manager, who requested anonymity.

Cisco decided to save $1 billion a year

Cisco partners believe that a number of reductions will be associated with unprofitable product lines.

We're going to shift the balance of our investment in R&D projects, focus on key areas with good prospects, "Robbins said.

Among the promising areas, he named cloud security and cooperation in the cloud, as well as the development of solutions for education and healthcare.

In addition, Cisco can reduce day-to-day business costs, such as real estate payments and utilities, as well as travel. In June 2020, Cisco hosted the Cisco Live 2020 digital event, and the partner summit scheduled for November was virtual. Cisco's main campus at,, has San Jose California not been used since March, as have a number of offices in, and San Francisco New York the state. Washington Cisco offices in,, and are also idle. China Italy South Korea Australia

Taking into account these changes, Cisco expects to save $800 million in the first quarter of fiscal 2021, which ends in November 2020 calendar year. Another $200 million of reduced costs will fall on the remaining months of the reporting year.^[4]

Cisco gave 75 thousand employees an additional day off

On May 22, 2020, Cisco gave 75,000 of its employees a day off. In an email distributed internally, human resources department CEO Francine Katsoudas said the extra day off is designed to help them recover from weeks of remote work amid the COVID-19 coronavirus crisis.

Cisco, one of the leaders in the global enterprise-grade network equipment market, has experienced high demand growth for its products after the sharp transition of employees of many companies to remote work. But, like other large corporations, Cisco employees also faced a number of problems working from home. Katsudas noted that some employees need to look after children who study remotely, and others take care of elderly parents. Some were left alone and hard to endure isolation.

Those Cisco employees who fail to work on Friday due to customer commitments or other urgent tasks will be able to take a day off work on another day

It may seem that there are very few reasons not to take the day off, "Katsudas said in a letter. - We can't go to visit or theater, people need us, and we like our work. But there is one reason to stay home: ourselves.

Employees who have obligations to customers or have important assignments on that day will be allowed to take a day off work on another day, Katsudas said.

Another tech giant, Google, also asked employees to take Friday's weekend to address burnout issues at work, the company said. Google said it will start opening new offices around the world as early as June 2020, but most Google employees are likely to work from home before the end of the year. Facebook also said it would allow workers who can work remotely to continue working from home until the end of 2020.^[5]

2019: Three Cisco employees go to rival, taking secret documents

On November 19, 2019, it became known that three Cisco employees went to a rival company - Poly, taking thousands of classified documents.

Cisco has sued Wilson Chung, James He and Jedd Williams "for gross violations of intellectual property rights," writes the Silicon Valley Business Journal, citing company spokesman Robin Blum.

Cisco employees went to a rival company - Poly, taking thousands of classified documents

According to him, the company rarely files such lawsuits, but does so to protect its investments in research, development and "valuable intellectual property."

Wilson Chang and James He, working for the Unified Communications Technology Group division, downloaded several thousand confidential documents shortly before leaving at Poly that are owned by the company and relate to the development, production, pricing and evaluation of market opportunities for Cisco products, according to Cisco's complaint. They tried to cover their tracks, but the manufacturer of network equipment discovered the fact of copying commercial secrets.

As for Jedd Williams, he, while holding a senior position in sales at Cisco, uploaded a Cisco spreadsheet with sales forecasts in mid-October 2019, and then announced his dismissal for personal reasons. He soon moved to the same rival firm as two other employees.

Williams is also accused of introducing a market strategy at Poly, which he called Project X and developed as an employee of Cisco.

After Cisco went to court, Poly shares fell 2% in price. In early November 2019, their value decreased by a quarter due to weak financial results. Poly's market capitalization is just over $1 billion against Cisco's $193 billion (as of November 20).^[6]

2018: Average employee experience - 7.8 years

In April 2018, it became known that in Cisco the average work experience of one employee is 7.8 years. The network equipment manufacturer provides a gym, pays for five weekends a year for social activities, compensates for training costs and issues bonuses each quarter for participation in socio-cultural events. Read more here.

2017: 1,100 job cuts after a year and a half of falling sales

On May 17, 2017, Cisco announced another staff reduction after a year and a half of falling sales.

According to The Wall Street Journal (WSJ), citing a Cisco report sent to the US Securities and Exchange Commission, by November 2017, the company's headcount will decrease by 1,100 people. Compensation expenses and other measures related to personnel restructuring are estimated at $150 million.

Cisco Telephone

In August 2016, Cisco reported the dismissal of 5,500 people, corresponding to 7% of the state. At that time, the company worked less than in May 2017, when new job cuts were announced, Cisco CEO Chuck Robbins told the publication. By January 28, 2017, Cisco's total workforce was 71,959 .

According to observers of the edition Financial Times, Cisco is laying off people in order to save and increase profit margins, which the company is trying to increase by working in new services and software markets. The vendor is showing revenue growth in the field of information security, but is facing weak demand for key products - network equipment, adds WSJ.

In order to develop fast-growing areas, Cisco is actively buying up companies specializing in cloud computing, analytics and artificial intelligence. In May 2017, the corporation announced three purchases.

Cisco announced the layoffs along with the publication of financial statements, from which it became known that the company's revenue has been declining for six quarters in a row. Against this background, the value of shares of the American manufacturer of routers and switches decreased by 7.7% during additional trading after the exchange closed on May 17, 2017.^[7]

2016: Cisco to lay off 14,000 employees or 20% of the state

The largest manufacturer of network equipment Cisco Systems Inc. intends to cut 14 thousand jobs, Interfax reports. The cuts will occur over the next few weeks.

To reduce the dependence on the production of equipment, the demand for which is falling, Cisco is actively changing the vector of development and investing in data analysis software and cloud technologies. The upcoming cuts are due to the fact that employees do not have the skills necessary for this.

As of April 30, 2016, Cisco employed more than 70 thousand employees around the world. The last major reduction in the company occurred in 2014: then the management fired 6 thousand positions.

2014: Reorganisation reduces 6,000 people

Cisco Systems revealed in the summer of 2014 plans for another reorganization, during which 6 thousand people, or about 8% of staff worldwide, will be reduced. In carrying out the restructuring, the company intends to take aim at the "key areas of growth" - Cisco's cloud, software and IT security^[8].

These layoffs, which were mentioned at the announcement of earnings for the 4th quarter, will begin in the 1st fiscal quarter. Which units will be affected is still unknown.

"If we are going to be the No. 1 IT player and we intend to be, then our ability to move requires decisiveness and requires investing in these [areas of] growth," Cisco Chief Executive Officer John Chambers said during a news conference with analysts.

2013: Reduction of 4 thousand managers

Cisco Systems announced in the summer of 2013 that it would lay off approximately 4,000 employees. The company has become too many middle managers, said Cisco CEO John Chambers, while only small working groups can provide a quick response to changes in the industry.

The costs associated with the downsizing will amount to about $550 million. From 250 to 300 million will be credited to the first quarter of fiscal 2014, which Cisco began on July 28. In the previous quarter, the company's sales increased by 6% compared to last year to $12.4 billion, and net profit increased by 18% to $2.3 billion.

This is not the first time Cisco has rebuilt the management structure. A few years ago, the company created so-called "councils" to coordinate the actions of various divisions. Subsequently, most of them were eliminated, which was also explained by the need to speed up the decision-making process.^[9]

2011: Crisis and reduction of 9% of staff

In July 2011 Cisco Systems , it reported a reduction in 6.5 thousand jobs, which is about 9% of the total staff (approximately 73.4 thousand people worldwide). In accordance with a statement Cisco made in May 2011, mass layoffs are part of the company's global initiative to reduce annual expenses by $1 billion, or 6%, transfers NYTimes.com.

On July 18, Cisco announced its intention to lay off 4.4 thousand employees. Another 2.1 thousand workers chose to quit under the early retirement program. According to the company, the cuts generally affected 15% of Cisco VP-level specialists and above. The company plans to notify employees who have fallen under the reduction (in the USA, Canada and other countries) about the dismissal in the company in early August.

According to Cisco estimates, the company will spend $1.3 billion on severance pay for laid-off employees, which are planned to be paid within a few quarters. At the same time, Cisco will pay $750 million, including $500 million for the early retirement program, only in the current quarter.

In addition, Cisco also announced its intention to sell its factory for the production of digital television consoles located in Mexico to the Taiwanese company Foxconn Technology Group. Under the terms of the deal, all employees of the plant - 5 thousand people - will move to work at Foxconn Technology in the first quarter of fiscal year 2012.

See also

• Employees and Human Resources at Microsoft
• Employees and Human Resources at Oracle
• Employees and work at Apple
• Employees and work at Google

Notes