Cisco sure changed its tune in six months. The company is reportedly laying off about 9% of its workforce, six months after CEO Chuck Robbins pledged not to cut jobs in response to the COVID-19 crisis.
The layoffs, first reported by FierceTelecom citing a thread on TheLayoff.com, will impact more than 7,100 employees.
Robbins, during the company’s most recent earnings call, announced a plan to move most of its portfolio to a cloud-based offering. However, in early April, one month after the World Health Organization declared COVID-19 a global pandemic and weeks after at least one-fourth of the U.S. economy was completely shut down, Robbins pledged to not contribute further to the economic calamity.
“There are companies whose revenue has gone to zero who have no option. To me, it’s just silly for those of us who have the financial wherewithal to absorb this, for us to add to the problem. It’s illogical,” he told Bloomberg, and followed up by calling on other companies to make similar commitments.
Cisco today declined to say how many employees will be impacted by the cuts. “Over the coming weeks and months, Cisco will increase our investments in key business areas that will drive customer satisfaction and partner profitability going forward and reduce investments in others,” a Cisco spokesperson said in a statement.
“We will be restructuring parts of our business as a result. Our employees are our priority and we are committed to providing our full support to those transitioning to new roles or teams within Cisco or leaving the company. Where possible, we will offer employees options that enable them to make decisions that best suit their career goals and personal circumstances,” the spokesperson added.
Cisco Shifts Focus to 5G, WiFi 6Areas of increased investment include multi-cloud strategies, 5G, WiFi 6, 400G optical networking, next-generation silicon, and artificial intelligence (AI), Robbins said during Cisco’s earnings call in August.
Cisco said it had 77,500 employees at the end of July 2020, with its workforce evenly split between the U.S. and the rest of the world. The company reported $12.2 billion in revenue, a 9% year-over-year decline, in the fourth quarter of its fiscal 2020. It also forecast a year-over-year revenue drop between 9% to 11% during the current quarter.
The company earlier this month was ordered to pay $1.9 billion for infringing on patents owned by Centripetal Networks, according to Bloomberg. The company said it will appeal the judge’s decision in that case.
The U.S. this year has suffered the worst job losses per capita since the Great Depression, which started 91 years ago. Almost 22.2 million workers were laid off in March and April, and roughly half of those people have returned to work in the six months since.
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