Cisco wields axe again as results season swings around
In an industry addicted to job cuts, 34,000 staff roles vanished in first six weeks of 2024
More than 34,000 tech staff who started 2024 in gainful employment are now looking for a new job – and that's before networking titan Cisco reportedly pulls the plug on thousands more to lighten the payroll.
The latest job statistics pale in comparison to a year ago, when in January alone almost 90,000 were made redundant by tech businesses coming off a hiring binge during the pandemic and caught out by slowing sales, according to Layoff.fyi.
It shows that maybe not all tech businesses are confident that customers will spend more again over the course of this year, or perhaps some – like Google – think they still have too many in the rank and file.
Cisco was reported at the weekend to be scheduling another major restructure to focus on areas of the portfolio with higher growth potential. Reuters reckons that thousands of employees could be at risk, though the final number of layoffs are yet to be determined.
The Register asked Cisco to comment and a spokesperson told us: "As I'm sure you can imagine, we're in a quiet period and we do not comment on speculation or rumor." This is in reference to the period before the next set of results are published, which for Cisco is scheduled for February 14.
In its last set of financial results for its Q1 of fiscal 2024 ended September 30, 2023 – not all corporations' fiscal years track to calendar years – Cisco issued a gloomier than expected forecast for this current quarter of $12.6 billion to $12.8 billion, which would equate to a year-on-year single digit decline.
New product orders had slowed in the quarter as customers digested networking inventory they had bought from Cisco previously, said CEO Chuck Robbins during the conference call in November.
"We saw it mostly with our larger enterprise, service provider, and cloud customers, and it was most pronounced in October," he said. "Based on our analysis, we believe this phase is temporary and estimate there is an additional one to two quarters' worth of shipped orders in customers' hands still waiting to be deployed. This has near-term consequences for revenue, and our outlook for the next couple of quarters."
Cisco shares declined as much as 13 percent in after-hours trading as stockholders and Wall Street showed their displeasure.
- 'Only 700 new IT jobs' were created in US last year
- IBM talks up cost savings, including 'workforce rebalancing'
- Enterprise IT giant layoffs happened because 'some CEOs got ahead of their skis'
- AI investment still at the planning stage through 2024, Gartner says
The world's largest networking player is currently in the process of buying Splunk for $28 billion in a deal announced at the start of November, when Splunk also confirmed it was axing 560 heads or 7 percent of the workforce. This was the same month Cisco said it was planning to erase around 5 percent of its employees. Now there may be more to come.
Other job cutters in the first six week of 2024 include Microsoft, which told 1,900 of the newly assimilated Activision Blizzard personnel that they are surplus to requirements, and Google announced layoffs across the business, warning that more are to come.
SAP said a restructure would affect 8,000 roles, but claimed it is planning to exit the year with the same headcount as it hires in faster growing areas. ®