Cisco Systems has let go 3,500 employees since the COVID-19 pandemic began, the tech giant confirmed.
“We are always evaluating our growth areas and aligning our resources to meet customer demands. As a result, since the pandemic began, we have restructured approximately 3,500 roles. In addition, we’ve hired thousands of people for new roles in other areas of the business,” a Cisco spokesperson said in an email to CRN.
Cisco is also refuting a report by The Washington Post said that the tech giant planned to cut at least 8,000 employees, or more than 10 percent of its workforce, citing three former employees with knowledge of the matter as its sources.
As of July 25, Cisco said it had 77,500 employees globally, with 38,900 of those in the U.S.
Cisco Chairman and CEO Chuck Robbins at the start of the pandemic in the U.S. in April told his staff not to worry about their jobs, he said in an interview with Bloomberg. “Why would we contribute to the problem? To me, it’s just silly for those of us who have the financial wherewithal to absorb this, for us to add to the problem,“ he said at the time.
The company in March pledged US$225 million in cash and product donations to support both global and local responses to the COVID-19 pandemic. Cisco’s investment included US$8 million in cash and US$210 million in product that was dispersed across several groups, including health care, education, and government response.
However, Cisco later felt the impact of the pandemic, which caused long-lasting financial implications for many tech companies globally. The company’s fiscal first quarter 2021 earnings, which ended Oct. 24, saw revenue declined for the fourth quarter in a row, falling 9 percent to US$11.93 billion compared with US$13.16 billion in the year-ago quarter.
Robbins announced in August that the company would be cutting US$1 billion in costs to reduce its cost structure over the next few quarters in the wake of a global fiscal downturn as a result of the COVID-19 pandemic. Robbins at the time said Cisco was going to “rebalance” its investments to focus on key growth areas, such as 5G, AI, and next-generation silicon. But in addition to R&D adjustments, Cisco’s cost-cutting measures included a companywide restructuring involving both a voluntary early retirement program and several rounds of layoffs across different geographies.
The company did not disclose potential layoff numbers in August.
However, Cisco did say the voluntary early retirement program would net an estimated pretax charges of approximately US$900 million, consisting of severance and other one-time termination benefits, among other costs. The company said at the time that it expected to gain US$800 million with these changes in place in the first quarter of Cisco’s fiscal 2021, which ended in November. The remaining amount will be recognized during the rest of the 2021 fiscal year.
A spokesperson for Cisco in October wouldn’t confirm the number of employees who received a voluntary retirement offer.
Cisco this month revealed it was letting go 101 employees from its San Jose, Calif., headquarters by Dec. 15 via Worker Adjustment and Retraining Notification (WARN) notices received by the state of California’s Employment Development Division earlier this month. The tech giant in August announced plans to cut US$1 billion in costs over the coming quarters to refocus its research and development investments to transition of the majority of its portfolio to be delivered as a service. The companywide restructuring included both a voluntary early retirement program that was completed in October, as well as layoffs.
In July, Cisco laid off more than 480 employees at both its San Jose and Milpitas offices in California when it cut 397 jobs at its headquarters and another 91 in Milpitas, which were effective July 31, according to WARN notices received by the state of California’s Employment Development Division in the summer
Cisco’s stock price has declined 7.7 percent so far this year, trading at US$44.68 on Thursday.