Cisco Announces 5% Workforce Reduction (4,000 Jobs) – Full Details & Analysis

Cisco Systems Inc., the leading provider of networking equipment, is set to slash thousands of jobs after facing a slowdown in corporate technology spending, which has dampened its sales growth. The restructuring plan, announced on Wednesday, will affect approximately 5% of Cisco’s workforce, translating to around 4,000 job cuts, with an estimated cost of $500 million.

The announcement came alongside a disappointing forecast, causing Cisco shares to plummet in late trading. Chief Executive Officer Chuck Robbins attributed the slump in sales to customer concerns about the economy, leading to deferred orders and increased scrutiny on investments. This move adds Cisco to a growing list of major tech companies scaling back, with nearly 35,000 job cuts announced in 2024 alone. Despite earlier hopes for a quick recovery, Cisco anticipates a prolonged downturn in spending by telecommunications firms.

Robbins aims to mitigate sales volatility by emphasizing networking services, particularly analytics and security features, while the impending acquisition of data-crunching software maker Splunk for $28 billion is expected to further reshape Cisco’s business landscape. Investors are eager to see how Cisco will capitalize on the AI spending boom, especially after announcing a collaboration with Nvidia Corp. to facilitate the deployment of AI solutions for corporate clients.