(CTN News) – Cisco (CSCO.O), a global leader in networking, has agreed to restructure its business, which will result in the layoff of thousands of employees, according to three sources familiar with the matter.
Based in San Jose, California, the company has a total employee count of 84,900 as of fiscal 2023, according to its website.
Employees of the company were quoted as saying that the company was still trying to determine how many employees were affected by the layoffs.
During the company’s earnings call on Feb. 14, it is expected that the company will make an announcement as early as next week.
Cisco announced during a conference call in November 2022 that it would be restructuring around 5% of its workforce, which would result in roughly $600 million in severance costs and other charges as a result.
A company spokesperson declined to comment.
The move would come at a time when several tech companies, including Nokia (NOKIA.HE) and Cisco Ericsson (ERICb.ST), have been laying off thousands of employees to cut costs over the past year in order to reduce operating expenses.
A number of big tech companies such as Amazon (AMZN.O), Alphabet (GOOGL.O) and Microsoft (MSFT.O) have implemented layoffs in the last few weeks.
On its previous earnings call, Cisco had cut its full-year revenue and profit forecasts in an indication that there was a slowdown in demand for the networking equipment it manufactures.
The company blamed the weakness on the slowdown in orders in the first quarter, saying that “Customers are focused on implementing and installing the products in their environments at the moment.”.
As a result of supply chain issues and a post-pandemic slowdown in demand, the Cisco Cisco company has had to accelerate its efforts toward software offerings, such as cybersecurity, in order to meet the company’s needs.