American tech giant Cisco is gearing up for a significant workforce reduction, with approximately 5% of its global employees set to face layoffs. The impending job cuts are part of Cisco’s ambitious plan to immerse itself in high-growth sectors such as artificial intelligence (AI) and software.
Renowned for its extensive line of networking hardware, spanning routers, switches, firewalls, and Wi-Fi devices, Cisco’s footprint extends to 92 countries and over 3,000 communities worldwide. The company holds a robust presence in Africa, operating in 23 countries, including Nigeria, Kenya, Egypt, Algeria, South Africa, Ethiopia, Angola, and Tunisia.
Cisco’s recent challenges stem from struggles with traditional switches and routers, exacerbated by a surplus of inventory clearance during the pandemic. This situation compelled the company to revise its annual revenue projections, initially set between $51.5 billion and $52.5 billion, reflecting a downturn from the initial forecast.
Anticipated to hit hardest in the third quarter of fiscal 2024, the job cuts are expected to result in numerous pink slips. With CEO Chuck Robbins steering the ship, Cisco aims to realign its focus towards future-oriented investments, emphasizing, “Our innovation sits at the centre of an increasingly connected ecosystem and will play a critical role as our customers adopt AI and secure their organizations.”
With an employee count of nearly 85,000, Cisco faces a substantial financial implication of approximately $800 million for severance and related costs. However, the company is banking on the boom in AI and software to act as a catalyst for a turnaround. Cisco expresses confidence in the combined strength of AI and software leadership, positioning itself as a frontrunner in the realms of security and observability in the age of AI.
