Cisco Set to Cut 14,000 Jobs – Report

World's biggest maker of IP equipment is set to slash employee numbers as it plans for a software-defined future, according to a report.

Iain Morris, International Editor

August 17, 2016

2 Min Read
Cisco Set to Cut 14,000 Jobs – Report

Cisco is set to lay off up to 14,000 employees, representing nearly a fifth of its entire workforce, according to a report from CRN, which cites multiple sources close to the matter.

The job cuts would be the biggest in Cisco's history and are due to be announced in the next few weeks, according to the report.

They would come as Cisco Systems Inc. (Nasdaq: CSCO) faces growing competition from companies and technologies that rely more heavily on software than hardware capabilities.

Cisco, which currently employs about 73,000 staff, still ranks as the world's biggest maker of IP equipment, including the routers and switches that power data networks, but it has been shifting its own focus to software through investments and takeover activity.

The company has already offered early retirement packages to a number of employees, reports CRN, and will reduce its total workforce by between 9,000 and 14,000 jobs.

A source cited in the story said the organization needed "different skill sets for the software-defined future."

CRN says that Cisco declined to comment on the report.

Want to know more about the emerging SDN market? Check out our dedicated SDN content channel here on Light Reading.

Nevertheless, there is a precedent for making sharp cutbacks at this time of the year: Exactly two years ago, Cisco announced plans to cut about 6,000 jobs, while a year earlier it said it would lay off about 4,000 employees.

Trip Chowdhry, an analyst for Global Equities Research cited in the CRN story, predicted in January that Cisco would cut 14,000 jobs this year as customers increasingly gravitated toward cloud products and services.

Cisco, which is due to report full fiscal year results late Wednesday, saw revenues dip by 1% in the February-to-April quarter, to around $12 billion, compared with the same period in 2015, with net income falling by 4%, to $2.3 billion.

Revenues from switching and NGN (next-generation network) routing fell by 3% and 5% respectively in the quarter, compared with the year-earlier period.

The company's share price has continued to perform well on the Nasdaq, having risen by around 15% since the beginning of the year.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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