Bay Area tech giant Cisco will lay off more than 4,000 in 5% staff cut

Cisco’s sign is displayed in front of the company’s headquarters on Feb. 9, 2024 in San Jose, Calif.

Cisco, the San Jose-based networking and telecommunications giant, is laying off 5% of its workforce.

The company announced the cuts in a Wednesday filing with the Securities and Exchange Commission, alongside its quarterly earnings report. Based on the company’s reported head count, the layoffs will hit at least 4,000 workers. Cisco wrote in the filing that the cuts are aimed to “realign the organization and enable further investment in key priority areas.”

Most of the cuts will go through this quarter, per the filing. Cisco estimated that severance payments and other termination benefits will cost the company $800 million.

In a statement to SFGATE on Wednesday, Cisco spokesperson Robyn Blum cited “the cautious macro environment, our customers continuing to absorb high levels of product inventory, and ongoing weakness in the Service Provider market,” as reasons for the layoff.

“The care of our people is a top priority, and we will provide impacted employees with career support and market-competitive severance packages,” the statement continued.

Cisco cut 5% of its staff in late 2022 as well, leading to hundreds of Bay Area layoffs. More Bay Area cuts followed in July, including 227 in San Jose. Blum did not respond to SFGATE’s question about the geographic distribution of Wednesday’s cuts, and the company has yet to file a WARN notice with the state about the mass layoff.

The company had about 84,900 employees at the end of July 2023, Cisco reported in a September filing. Just under half are based in the United States, with 30% of all workers in sales and marketing, and 28% in research and development.

The new layoff round comes as Cisco reports shrinking revenues, though the company is still turning a mighty profit — $2.6 billion from November through January, according to a press release Wednesday. Cisco sells cloud computing software and hardware, and earlier in February announced a data centers partnership with Santa Clara-based chipmaker Nvidia.

Cisco is in the midst of acquiring San Francisco-based Splunk for $28 billion. The deal has not yet closed and the smaller company has also laid off hundreds of workers over the last year.

Hear of anything happening at Cisco or another tech company? Contact tech reporter Stephen Council securely at [email protected] or on Signal at 628-204-5452.