Cisco reports record revenue and sheds 4000 jobs in the same day

Despite delivering its largest quarterly revenue in the company’s history, California-based digital communications company Cisco announced on the same day that it is cutting 4000 jobs as part of its US$600 million restructuring plans.

Cisco reported a 6 percent year-on-year spike in revenue to US$13.6 billion for Q1 of its fiscal 2023, ended 29 Oct., with profits made in the security, core switch and router division.

“The easing of supply constraints and our ability to deliver hardware is now releasing software subscriptions that were sitting in backlog connecting to unshipped hardware,” said Cisco’s chief executive officer Chuck Robbins in a statement. “The redesign of many of our products has also helped bring supply stability and more resiliency.”

The company also proceeded to up its revenue forecast from 6 to 6.5 per cent growth.

But that didn’t stop Cisco from shedding headcount. Around five per cent of its 26,000 workforce reportedly will be slashed. The company did not disclose which divisions will be affected. However, its Internet of the Future (cables, optical, and edge) division saw revenues drop five percent, while the Collaboration (meetings) division fell two percent.

In a statement, Cisco said this decision is not motivated by cost savings and is rather a “rebalance including talent movement options and restructuring”, which means that a laid off employee can seek a another job at Cisco but it is not guaranteed.

The company also said that decision to layoff staff ” was not taken lightly” and that “generous severance packages, job placement services and other benefits wherever possible” will be given to those affected.

The company emphasized in documents filed with the US Securities and Exchange Commission that this US$600 million restructuring budget will cover the cost of the redundancies, property charges and other expenditure.

Cisco, like many other companies in tech including Meta, Amazon, Twitter and Intel, has announced the layoffs following hiring freezes earlier this year.

Following the announcement, the share price of Cisco bumped up four per cent.

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Ashee Pamma
Ashee Pamma
Ashee is a writer for ITWC. She completed her degree in Communication and Media Studies at Carleton University in Ottawa. She hopes to become a columnist after further studies in Journalism. You can email her at [email protected]

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