Report: Cisco ‘Set For Biggest-Ever Round Of Job Cuts’

Networking company Cisco may be set for the single biggest round of job cuts in its history, with plans to cut up to around 14,000 staff, or about 20 percent of its workforce, according to a report.

The company is planning to cut between 9,000 and 14,000 staff worldwide as it shifts away from selling networking hardware toward software-based products, according to a report by channel-oriented news publication CRN, which cited several unnamed sources with knowledge of the matter.

Announcement ‘coming soon’

Many early retirement packages have already been offered and the company is expected to announce the cuts in the next few weeks, the people said.

Cisco has announced large job cuts around this time of year, which marks the end of its financial period, several times in the past, with 6,000 redundancies announced in August 2014, 4,000 in August of the preceding year, 1,300 in July 2012 and 6,500 in July 2011.

If the reported figures are accurate, the latest round of cuts would be at least considerably larger than those earlier announcements, which affected at most 8 or 9 percent of its overall headcount at those times, and at most would be the biggest single staff reduction in the company’s 32 years.

Cisco announced no cuts last summer, which coincided with Chuck Robbins taking the role of chief executive in July.

Software skills

The move is not entirely unexpected, with industry analysts having predicting large cuts this year as a result of Cisco’s move toward selling more software and cloud-based services, including security products, which require fewer back-end staff.

Cisco is lagging behind other major IT vendors who began shifting toward cloud services earlier and have already made related layoffs, analysts have said.

One of the report’s sources said the cuts were specifically part of a shift intended to bring in staff skilled in the area of software-defined networking.

Cisco is set to announce its fourth fiscal quarter results after markets close on Wednesday. In a regulatory filing it said it had 73,104 staff as of 20 April.

The company has made recent investments in areas including communications and security services and recently said it plans to use IBM’s Watson analytics capabilities in its cloud services.

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