RESEARCH TRIANGLE PARK – Tech giant Cisco plans a $600 million restructuring, the move including layoffs, moving some employees to already open jobs within the company, and also make changes in its real estate holdings.
Job cuts will affect %5 or some 4,100 jobs, according to the Silicon Valley Business Journal.
Cisco employs several thousand people at its campus in RTP.
CEO Chuck Robbins said the plan will “rebalance” some business units. However, he didn’t go into much detail in Cisco’s (Nasdaq: CSCO) quarterly earnings conference call on Wednesday evening.
“If you look at the number of jobs that we have opened in the areas that we’re trying to invest, it’s just slightly lower than the number of people that we believe will be impacted,” he explained. We’re going to be working really hard to help match our employees to those roles.”
Employees will be told more details of the plan on Thursday, Robbins said.
“I’d be reluctant to go into a lot of detail here until we’re able to talk to [employees]. I would say that what we’re doing is rightsizing certain businesses,” Robbins said, according to Reseller News
“I would say that what we’re doing is rightsizing certain businesses. We’re really focused on resource moving into like in the enterprise networking space, accelerating our platform strategy,” he added in the call in a transcription provided by Seeking Alpha. “We will be making significant investments in security and beefing up our team there and the capacity to continue to innovate there. Those are important areas.
“And so if you would understand, I’d prefer to wait and talk to our employees tomorrow about it. But you can just assume that we’re going to — we’re not actually — there’s nothing that’s a lower priority, but we are rightsizing certain businesses. And since you asked about collab, I’ll tell you a little bit about what — we see incredible strength right now in our Calling business, our Cloud Calling business. We see great strength in our Cloud Contact Center business. And the compares on the meeting side are going to start to make that — give us the ability for that to be a much more favorable component.”
Chief Financial Officer R. Scott Herren described the cost-cutting moves as a “rebalance across the board” rather than a layoffs-cost cutting move.
“And to be clear [about] this: Don’t think of this as a headcount action that is motivated by cost savings. This really is a rebalancing. As we look across the board, there are areas that we would like to invest in more. Security, our move to platforms and more cloud-delivered products. But we’re also going to maintain our financial discipline as we do that,” Herren said, according to Reseller News.
However, not every Cisco employee will find a new job.
“And so this is about just rebalancing across the board. In a perfect world, you’d have 100% skill match, and you can take the people in the areas or the skills in certain areas and just move them to where we need to invest and unfortunately, that’s not — it’s not a perfect world,” Herrn explained, according to the transcript of the call.
“But we do have a — if you look at the number of jobs that we have opened in the areas that we’re trying to invest, it is just slightly lower than the number of people that we believe will be impacted. We’re going to be working really hard to help match our employees to those roles to the extent there’s a skill match. So, we’re going to work really hard at that.”
In the earnings announcement, Robbins said he saw positive signs.
“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,” he said in a statement. “These results demonstrate the relevance of our strategy, our differentiated innovation, and our unique position to help our customers become more resilient.”