Cisco announces a massive layoff for 4100 employees

Just this week, Cisco started implementing a round of layoffs that targeted a total of 5% of its employees. The news of these job cuts comes at a time when the employer is actively hiring talent for new positions as part of its restructuring process. The workers who do not get placed internally will leave their place of work with a severance package in hand. The tech sector has not been the only industry that has been under the spotlight due to massive layoffs this year. The media and entertainment industries also announced large-scale layoffs just weeks ago.

Although many anticipated a mass layoff at tech company Cisco, no one knew exactly which roles would be affected by these job cuts. The tech sector took a pretty big punch to the gut with these massive layoffs by industry giants such as Amazon, Meta, and Twitter. However, experts believe that these tech layoffs don’t represent the job market as a whole. These layoffs are a result of the big businesses feeling the current economic turbulence. If the underlying economic factors do not change, things will not look so well for those in the tech sector.

Cisco planned for a large-scale layoff in November. As the anticipated layoffs started earlier this week at Cisco, around 4,100 employees are set to lose their jobs. This comprises almost 5% of the entire workforce of Cisco. In an attempt to minimize the fallout, the company has started restructuring the business by taking in new workers to fill the gaps. Cisco has good plans to retain staff. They are moving current employees from the departments set to shut down, into new positions. This will ensure that the tech giant will have a just as large workforce by the end of the year as it did at the beginning.

Those who lose their jobs will be compensated with “generous severance packages,” as said by Cisco. The company learned that they were performing better than expected when its Q1 2023 earnings call was revealed last month. Although the net income slipped down by 10% to $2.7 billion, the year-over-year consolidated revenue showed a growth of 6%, amounting to $13.6 billion. Although the tech company has not revealed which departments will face these job cuts, they released numbers that reflect the revenue by product. Cisco’s year-over-year growth by product was announced to be:

• Agile Networks – increased by 12%
• End-to-End Security – increased by 9%
• Optimized Application Experiences – increased by 7%
• Services - No change
• Internet for the Future – decreased by 5%
• Collaboration – decreased by 2%
• Other Products – decreased by 47%

Just like the other tech players’ Cisco’s stocks took some pretty big hits throughout the year. Cisco’s stock started at $62.90 on the 3^rd of January and remains at $47.81 by the 16^th of December. The stocks fell to their lowest value, $38.60, on the 13^th of October.

Tech layoffs have been the talk of the job market since a few months ago. These job cuts have affected thousands of American workers. However, if we put things into perspective, only 2% of the 153.5 million jobs in the American economy fall under the tech sector. Yes, we saw some very significant numbers of laid-off workers in the past few weeks. But if we consider the whole economy of the states, these numbers are almost minuscule. The tech sector is greatly affected by the behavior of the stock market. However, the overall economy is not feeling the same effect as those who work in the tech sector. Still, there are 1.7 jobs open for every unemployed American. The unemployment level is the lowest it has been in 50 years. And a lot of employers are hiring talent enthusiastically, even as we speak.