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- Cisco will be making 4,000 workers redundant very soon
- Last quarter the company posted a "record" 12% growth in revenue
- Investors seem happy with revenue growth and the future outlook
Cisco has confirmed it will be laying off around 4,000 workers, representing 5% of its global headcount, as part of an ongoing restructuring effort to focus on AI, silicon, optics and security.
Company CEO Chuck Robbins announced the plans in a post praising the firm's "record" revenue growth of 12%, declaring that "Our Path Forward" must include some job losses along the way.
Rather than being purely a cost-cutting exercise, or a response to AI-enhanced productivity rendering some human workers irrelevant, Robbins stressed the job cuts would fuel a company restructure, giving it the "focus, urgency, and the discipline" to tackle high-growth areas.
Cisco cuts 4,000 jobs
The company added that it will continue hiring in high-growth areas like AI infrastructure, silicon development, optics and fiber networking, cybersecurity and the internal deployment of AI and automation, even though 5% of its workers would be affected in this series of layoffs.
Cisco confirmed $15.84 billion in revenue, up 12% year-over-year in its results - but most notably, networking orders grew by more than 50% and data center switching orders rose over 40%. To date this fiscal year, Cisco has also secured $5.3 billion in AI infrastructure orders from hyperscalers.
"We will provide support in finding new opportunities, whether internal or external, through Cisco’s placement services," Robbins added, boasting that the program has seen a 75% success rate in next role discovery.
Despite the considerable loss, investors seemed pleased with Cisco's reaction to market trends and its restructuring effort to focus on high-growth areas, with shares rising over 20% since yesterday's announcement.
It's also a trend we're seeing across the entire industry, with companies like Meta, IBM and Salesforce also blaming redundancies on shifting priorities. While this is a shift from previously blamed pre-pandemic overhiring and AI-induced efficiency gains, it's still disappointing news for the 108,000 tech workers affected this calendar year alone (via layoffs.fyi).
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