Cisco Systems (CSCO)

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Cisco Systems plans a new round of layoffs amid an uncertain outlook for the economy
By: Silicon Valley Business Journal | February 28, 2020

A round of job cuts is coming to Cisco Systems Inc. as the company — and nearly all of the rest of the tech industry — faces uncertain economic prospects for the near future.

The Wall Street Journal reports that the networking equipment maker is planning a round of layoffs, but didn’t say how many or what jobs would be affected.

Cisco said it would offer support to employees affected by the layoffs.

Business Journal research shows that, as of August 2019, San Jose-based Cisco — led by CEO Chuck Robbins — employed 14,185 people in Silicon Valley, out of a global workforce of about 74,200. This places it at No. 4 on SVBJ’s List of the largest technology employers in the region, and No. 6 on the List of the largest employers in Silicon Valley overall.

Earlier in February, Cisco reported a 3.5 percent fall in revenue in its latest quarter, ended Jan. 25, and predicted a continuing slowdown in the current quarter along the same lines. It reported $12 billion in revenue for the quarter, in line with analyst predictions, though down slightly from the $12.45 billion in revenue it reported for the same period last year.

Cisco’s stock was valued at $38.72 a share as markets opened on Friday, down from a closing price of $40.04 the day prior — roughly the lowest point it has ever reached in the last year or so. The company currently holds a market cap of $164.38 billion.

The company is currently in the midst of shift toward a software and subscription business model, which has resulted in a number of high-level departures in recent years. In December, Cisco unveiled a slate of silicon, software and router products that one executive said were “so significant and expansive, they will change the economics of the Internet for the next generation.”

In January, Cisco also added AMD CEO Lisa Su to its board.

The cuts come amid a time of growing uncertainty for the tech industry and the economy in general. The coronavirus outbreak has sent global markets into a tailspin as governments impose quarantines and companies suspend operations in an effort to stem the spread. Tech companies are also feeling the heat as their supply chains — many of which are rooted in Chinese manufacturing facilities — are disrupted.

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