Cisco to lay off 20pc of workforce
Up to 14,000 jobs are reportedly on the line at the network equipment maker.
Network equipment maker Cisco is reportedly set to lay off a substantial chunk of its workforce, with up to 14,000 jobs on the line.
According to technology news site CRN, the California-based company has already started offering employees early retirement packages and the bulk of job cuts will be announced within the next few weeks.
The report of the mass layoffs comes on the eve of Cisco announcing its fiscal fourth quarter numbers.
According to CRN, the heavy cuts have become necessary as Cisco pivots from an out and out hardware maker to a more software-centric company.
The company’s overall headcount stood at 73,104 as of April 20, 2016, according to a filing with the US Securities and Exchange Commission (SEC). The cuts will be single biggest reduction in workforce in Cisco’s 32-year history, the CRN reports.
The last time Cisco swung the axe was in August 2014, as it shed 6,000 employees, almost 8 per cent of its global workforce, from its payrolls.
Cisco’s last quarterly results in May highlighted the pressures the US giant is struggling to tackle. The company’s core business – switches and routers – has been hit by subdued demand.
With carriers cutting back their hardware spend for networks and 5G technology still in a nascent stage, equipment vendors are finding it hard to make money from hardware. Cisco is countering the trend by moving into software and services which in turn is forcing the company to redefine it workforce.
Cisco isn’t the only equipment maker facing headwinds at the moment as demand for hardware continues to slump. Last month Sweden’s Ericsson, one of the world’s largest telecom-gear providers, posted a 24 per cent drop in second-quarter net profit and announced a reduction in its overall research-and-development spend and workforce.
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