Exclusive – Cisco to cut thousands of jobs to focus on high-growth areas – Source By Reuters

© Reuters. FILE PHOTO: A sign bearing the logo of communications and security technology giant Cisco Systems Inc is seen outside an office in San Jose, California, U.S., August 11, 2022. REUTERS/Paresh Dave/File Photo

Written by Utkarsh Shetty and Supantha Mukherjee

(Reuters) – Network giant Cisco (NASDAQ:) plans to restructure its business, including laying off thousands of employees to focus on high-growth areas, according to three people familiar with the matter.

The San Jose, California-based company had 84,900 total employees as of fiscal 2023, according to its website.

A person familiar with the matter said the company was still determining how many employees would be affected by the layoffs.

An announcement could come as early as next week as the company prepares to report earnings on February 14th.

In November 2022, Cisco announced a restructuring in its earnings call that affected about 5% of its workforce, resulting in $600 million in severance and other costs.

Cisco declined to comment.

The move will come at a time when technology companies including telecoms Nokia (HE:) and Ericsson (BS:) have laid off thousands of employees last year to cut costs.

Several large technology companies, such as Amazon (NASDAQ:), Alphabet (NASDAQ:), and Microsoft (NASDAQ:), have implemented layoffs in recent weeks.

Cisco cut its full-year revenue and earnings forecasts in its previous earnings call in a sign that demand for networking equipment is slowing.

The company cited the slowdown in orders in the first quarter as a weakness, saying, “Customers are currently focused on installing and implementing the product in their environments.”

The company has accelerated its push into software products such as cybersecurity in recent years due to supply chain issues and slowing demand following the pandemic.