Cisco layoffs, restructuring imminent – report

According to a new report from Reuters, Cisco is preparing to lay off thousands of employees while it looks to restructure its business amid flagging demand.

The company is scheduled to report its quarterly earnings later this week, and could announce the layoffs around that event.

It's unclear how the layoffs might affect Cisco's business in the telecom industry. According to the Reuters report, Cisco management is still determining which employees will be affected.

Broadly, Cisco appears to have been impacted by dwindling network operator spending just like other equipment suppliers including Nokia and Ericsson. Indeed, Ericsson officials suggested more job cuts may be on the horizon after the company already shed 9,000 positions in recent months.

To be clear, equipment suppliers aren't the only companies cutting staff. AT&T, T-Mobile and Verizon cut about 8% of their combined workforce last year, according to their latest figures.

In its most recent quarter, Cisco reported a 36% year-over-year rise in net income, to $3.6 billion, on 8% growth in sales. But the company's outlook – of a 6% drop in sales – sent investors fleeing.

This would be the latest round of cuts at Cisco. The company cut around 5% of its workforce – affecting 4,000 employees – in 2022. At last count Cisco had around 85,000 employees.

Cisco, for its part, has been putting more focus on its AI efforts in recent months. The company expects to derive around $1 billion in annual orders from AI. Along those lines, Cisco recently announced a new partnership with Nvidia, which supplies most of the chips running AI operations from the likes of Microsoft and Amazon.