Cisco layoffs impact over 300 employees

Cisco plans to lay off 350 employees in Silicon Valley next month, according to Seeking Alpha.

By mid-October, Cisco will reduce its headcount by 227 in its San Jose office and 123 employees in Milpitas, according to the California Employment Development Department. The majority of layoffs at both offices are software engineering positions, as reported the SFGate.

Cisco's layoffs are part of a "rebalancing effort" the company began in November 2022, "which included a limited restructuring impacting our real estate portfolio and approximately 5 percent of our workforce," according to a statement by a Cisco spokesperson. The 5% headcount reduction equates to 4,000 employees.

"As we announced then, this is not about cost savings as we have roughly the same number of employees as we did before the process began," they added. "This rebalancing is about prioritizing investments in our transformation, to meet and exceed our customers' expectations in the changing technology landscape. We will continue to do everything we can to help place affected employees in open roles and offer extensive support including generous severance packages."

The router and switch equipment maker experienced a solid first half of the year and a 16% increase in sales year-over-year to $15.2 billion in its Q4 (which ended in July), reported Light Reading's Iain Morris.

"Despite upping its investments in research and development, it was able to report a huge increase in net profit of 41%, to nearly $4 billion," wrote Morris.

Other layoffs

Despite a financially sound year, Cisco is among other large US telecom companies cutting jobs. Verizon and Crown Castle are also reducing their head counts.

Crown Castle announced in July plans to reduce its headcount by 15% and is expecting a $90 million reduction in services revenue for 2023.

Verizon launched a cost-savings program in 2022. "That program is designed to cut $2-3 billion from Verizon's bottom line by 2025. And that program builds on the four-year, $10 billion cost-cutting program Verizon finished in 2021," reported Light Reading's Mike Dano. He added that Cisco, Dish Network and Ericsson are among other companies conducting layoffs in the telecom industry.

Dano explained that the industry wide layoffs align with the current economic climate: "The news isn't surprising: The sector is experiencing a spending slowdown, exacerbated by rising interest rates and increasing competition. Further, similar situations are playing out in other parts of the wider technology market."