Cisco to soon announce 14,000 job cuts

Networking equipment giant Cisco Systems is expected to announce soon the laying off of about 14,000 employees, tech news site CRN yesterday reported, citing multiple sources close to the company.

The layoff, which is expected to be announced within the next few weeks, represents nearly 20 per cent of the San Jose, California-based company.

Cutting 14,000 employees out of its 73,104 would be the single largest layoff in Cisco's 32-year history, the report said, adding the company has already offered early retirement package to employees.

Citing Wall Street analyst Trip Chowdhry of Global Equities Research, CRN said that Chowdhry had predicted as early as January that Cisco would cut 14,000 employees in 2016 since the company did not need as many employees in the back-end process as more customers transition to the cloud as well as Cisco being a late entrant to the cloud market.

The latest round of layoffs comes as the fourth workforce cut in about as many years for a company that was once integral to the internet boom.

In August 2014, Cisco had cut 6,000 jobs over the uncertainty in global demand and the sluggish sales and increased competition in emerging markets. (See: Cisco to cut 6,000 jobs amidst lacklustre quarterly results) In the preceding year it had cut 4,000 jobs after having reduced its workforce by 1,300 in 2012 and 6,500 in 2011.

The company, which was once the dominant player in hardware that moved the world's digital information around and between computer centres, now faces challenges from younger companies.

While Cisco's position at the top has remained secure, it has been getting harder it to command the profit margins it once did.

The company's new CEO, Chuck Robbins, is planning to boost growth by moving the company's offerings toward low-cost software-based networking, security and management products.

Cisco is expected to report a 2 per cent decline in sales to $12.6 billion in its fiscal fourth-quarter earnings tomorrow after market close in New York.