Following in the footsteps of other global telecommunications suppliers, Cisco may reorganize its business operations and lay off thousands of employees as a result.
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Cisco, the networking giant, is planning to reorganize its business, which could include laying off thousands of employees, according to a Reuters report.
According to the Reuters report, the reorganization plans are expected to be announced later this week during an earnings. Cisco had planned to focus on regions . However, the report did not specify those high-growth regions or the number of employees who would likely be laid off. Cisco had 84,900 employees across all geographies by the end of fiscal 2023.
In November 2022, Cisco announced a restructuring that included a $600 million payment for severance and related charges. “Cisco’s decision to reorganize and lay off employees is part of a familiar pattern, as it did in November 2022, when approximately 5% of its workforce was laid off. This reorganization is often a result of Cisco’s complex organizational structure, which has evolved through multiple acquisitions over time,” said Thomas George, President of CyberMedia Group and CMR.
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If Cisco goes ahead with the reorganization, it would join a growing list of telecoms vendors that have recently laid off employees. Finnish telecoms company Nokia announced in October last year that it would lay off 14,000 people after disappointing results in the third quarter of 2023.
Another global telecoms leader, Ericsson , announced in August 2023 that it would cut 750 jobs in the United States from its field operations. Adtran also recently announced plans to cut jobs across its global operations. Amdocs , an Israel -based communications software and services company , also laid off 2,000 employees, or 6.5% of its global workforce, last year.
Telecom companies around the world are struggling to invest in 5G. According to a recent report by the GSMA, 5G will only account for 25% of total connections by 2025. There is a growing perception that various 5G use cases, such as private networks, Fixed Wireless Access (FWA), and Industry 4.0, among others, will take some time before they help telecom companies make money.
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Additionally, competition from cloud such as Amazon Web Services and Microsoft Azure is also affecting telecommunications providers such as Cisco.
How do the layoffs affect Cisco and its employees?
Layoffs can have significant impacts on both the company and the employees. From the company's perspective, layoffs can lead to a reduction in labor costs, but they can also cause a loss of talent and expertise.
On the other hand, for employees, layoffs can lead to loss of income, increased stress and uncertainty about the future. In addition, laid-off employees will have to face the challenge of finding a new job, which can be difficult depending on the state of the labor market.
Furthermore, layoffs can also have an impact on the morale of employees who remain with the company. They may feel insecure about their own jobs and worried about the future of the company. This can lead to a decrease in employee productivity and engagement.
Finally, layoffs can affect Cisco's image in the eyes of the public. If layoffs are handled poorly, this can cause negative public relations and damage the company's reputation.
Source: networkworld
