Cisco Layoffs Begin, 4000 Employees To Be Impacted: Report

Networking giant Cisco has reportedly begun employee layoffs which would impact 5 per cent of its workforce (more than 4,000 employees).

In November, Cisco had announced USD 600 million in severance as it factored in layoffs. The severance takes into account the company’s restructuring plan slated to begin in the second quarter of fiscal year 2023.

According to media reports, Cisco said in a statement "we didn't take this decision lightly, and we will offer those impacted extensive support, including generous severance packages".

As the world prepares for a potential recession in 2023, most of the big tech companies have made moves towards streamlining their workforce. This has included Meta’s 11,000 and Microsoft’s possible 1,000 job cuts in recent times. During its Q3 earnings, Intel too said that it would cut 20 per cent of its staff over the next year, while Google has introduced a hiring freeze in most areas of its business. Meanwhile, Twitter has cut over 3,700 jobs.

Cisco reported its Q1 FY 2023 at USD 13.6 billion in revenue, up 6 per cent year-over-year (YoY); GAAP EPS USD 0.65, down 7 per cent YoY, and Non-GAAP EPS USD 0.86, up 5 per cent YoY.

The company’s total annualised recurring revenue (ARR) was at USD 23.2 billion, up 7per cent YoY and product ARR up 12 per cent YoY. Total software revenue was up 5 per cent YoY and software subscription revenue up 11 per cent YoY.

Remaining performance obligations (RPO) at USD 30.9 billion, up 3 per cent year over year and product RPO up 5 per cent YoY.

In a statement, Chuck Robbins, chair and CEO of Cisco said, "Our fiscal 2023 is off to a good start as we delivered the largest quarterly revenue and second highest quarterly non-GAAP earnings per share in our history." 

"These results demonstrate the relevance of our strategy, our differentiated innovation, and our unique position to help our customers become more resilient," he added.

Total gross margins by geographic segment were: 63.0per cent for the Americas, 63.3per cent for EMEA and 62.3per cent for APJC.