Cisco Plans To Cut Thousands Of Jobs, Seeking Focus On High Growth Areas; Layoffs Continue To Be The Highlight In 2024

Cisco is making big changes to its operations; how?

Well, the company is planning to restructure their business, which means they’ll be letting go of thousands of employees. The goal is to shift their focus towards areas where they see the most potential for growth.

Currently, Cisco has nearly 85,000 employees, but the exact number of layoffs is still being decided.

An official announcement about the restructuring could happen soon, possibly next week, just before their earnings call on February 14th.

However, this isn’t the first time Cisco has made significant changes. Back in November 2022, they announced a restructuring during an earnings call, which affected about 5% of their workforce and resulted in $600 million in severance and related expenses.

This move is happening amidst a trend in the tech industry where companies like Nokia and Ericsson have also been cutting jobs to reduce costs.

Lately, many prominent tech companies like Amazon, Alphabet, and Microsoft have been going through similar processes of layoffs.

Cisco’s decision comes after they lowered their revenue and profit forecasts in the previous earnings call, indicating a slowdown in demand for their networking equipment, attributing this to customers focusing more on installing and using products they already have rather than purchasing new ones.

Cisco has been facing challenges with its supply chain and a decrease in demand following the pandemic, pushing it to emphasize software offerings such as cybersecurity.

So, while the layoffs might be a tough decision, Cisco is adapting to the changing market landscape and investing in areas they believe will drive future growth.

The Blood Bath
Last year witnessed a significant tech-wide reckoning, with over 240,000 jobs lost in the industry.

This figure was 50% higher than the previous year’s total. Major players such as Google, Amazon, Microsoft, Yahoo, Meta, and Zoom initiated mass workforce reductions.

Additionally, startups across various sectors announced cutbacks during the first half of the year. Although layoffs slowed down in the summer and fall, recent trends suggest a resurgence in job cuts.

Hence, the repercussions of last year’s industry-wide evaluation are ongoing, and despite economists’ warnings against recession concerns, there remains cautious optimism.

However, the recovery momentum within the tech sector has been sluggish. Consequently, tech companies are persisting in downsizing their workforces and shifting focus from growth-oriented strategies to efficiency-driven approaches amidst persistent market challenges.

Monitoring these layoffs provides insights into their impact on innovation, identifies companies grappling with significant pressures, and highlights available talent for businesses experiencing growth opportunities.

Regrettably, it also spotlights the profound human impact of layoffs and raises concerns about the evolving risk.

According to data from Layoffs.fyi, the total number of layoffs in 2023, based on completed months, stands at 224,503. This figure surpasses the total number of tech layoffs recorded in 2022, as per the tracker’s data.

Lets see what has happened so far –
January 2024

Microsoft – Is laying off 1,900 employees across its gaming divisions following its acquisition of Activision Blizzard. Mike Ybarra, Blizzard president, announced he will also be stepping down.

Swiggy – is set to cut about 400 jobs, 7% of its workforce, as the food delivery startup seeks to bring further improvements to its finances ahead of a planned IPO later this year.

Aurora – Laid off dozens of workers; the autonomous vehicle technology company has since confirmed that about 3% of its workforce has been laid off.

eBay – Will lay off 9% of the company’s workforce, affecting about 1,000 full-time employees. Additionally, in a blog post, the company also plans to cut contract roles in the coming months.

SAP – Announced it intends to offer voluntary buyouts or job changes to 8,000 employees amid restructuring.

Brex – Laid off 20% of its staff, affecting 282 workers. Co-CEO Pedro Franceschi, in a blog post, said that the company is prioritizing “long-term thinking and ownership over short-term gains in our comp structure.”

TikTok – Eliminated around 60 jobs across the U.S. in Los Angeles, New York, and Austin in addition to layoffs in international markets. The affected roles, according to NPR’s initial reporting, are largely in sales and advertising.

Vroom – Is cutting 90% of its employees as it shuts down its online used car marketplace and shifts resources into two business units; one focused on auto financing and the other on AI-powered analytics.

Riot Games – Is laying off 11% of its workforce, affecting about 530 employees, as the company focuses on “fewer, high-impact projects.” Simultaneously, it is also sunsetting its five-year-old publishing group, Riot Forge.

Wayfair – Is eliminating 13% of its global workforce, affecting 1,650 employees, in a restructuring effort aimed at cutting layers of management.

YouTube – Will eliminate 100 employees, a spokesperson confirmed to TechCrunch, as part of a restructuring effort in its creator management and operations teams.

Google – According to a leaked memo, Google Is laying off “hundreds” of employees in its advertising sales team. The cuts come a week after the company did sweeping layoffs across its hardware teams.
And as per CEO Sundar Pichai told the company in a memo that more layoffs will come throughout the year,

Pixar – Is going to lay off employees in 2024, with the total impacted employees potentially reaching as high as 20% of the animation studio’s 1,300 person workforce. The cutbacks come as Disney looks to reduce the studio’s output as it struggles to achieve profitability in streaming.

Audible – Is laying off 5% of its workforce, citing an “increasingly challenging landscape,” according to a leaked memo obtained by Business Insider.

Discord – Is laying off 17% of its staff, impacting 170 people. In an internal memo, Discord CEO Jason Citron blamed the cuts on the company growing too quickly.

Google– Laid off hundreds of employees across its Google Assistant division and the team that manages Pixel, Nest and Fitbit hardware.

Amazon – Is laying off “several hundreds” of employees at Prime Video and MGM Studios.

Twitch – Is reportedly laying off 500 employees, 35% of its current staff, amid a continued struggle to achieve profitability in the face of rising costs and community backlash. The pending layoffs come after hundreds more employees were laid off in 2023.

Treasure Financial – Layoffs, conducted in December, had impacted 14 employees, accounting for 60% to 70% of the company.

Duolingo – Confirmed it cut 10% of its contractor workforce at the end of 2023 as it turns to AI to streamline content production and translations previously handled by humans.

Rent the Runway – Will cut about 10% of corporate roles as it goes through a restructuring plan following Anushka Salinas’ planned resignation as operating chief and president at the end of January.

Unity – Is reducing its workforce by about 25%, or 1,800 people; the company went through three rounds of layoffs in 2023.

Pitch – Laid off two-thirds of its employees as the German startup looks to pursue a “completely different path.” CEO and co-founder Christian Reber also stepped down.

BenchSci – The AI and biomedical startup reportedly cut 17% of its workforce January 8, citing “shifts in the economic environment,” in a LinkedIn post announcing the layoffs.

Flexe – Eliminated 38% of its staff January 8 as the online retail logistics company follows up after conducting layoffs in September 2023.

NuScale – Announced January 8 it is laying off 28% of its staff, or 154 workers, as the small modular nuclear reactor company shifts its focus to “key strategic areas.”

Trigo – Is reportedly laying off 15% of its workforce focused on computer vision for retailers.

InVision – Is shutting down at the end of 2024 after a 12 year run; the design collaboration startup was once valued at nearly $2B.

VideoAmp – Is laying off nearly 20% of its workforce as it tries to maintain its battle with Nielsen over media measurement; additionally CEO Ross McCray stepped down from the company.

Orca Security – Is laying off roughly 15% of its staff, totaling 60 employees and reportedly plans to move some impacted employees into other positions at the company.

Frontdesk – Laid off its entire 200-person workforce January 2 after attempts to raise more capital failed; the mass layoff comes just seven months after the startup acquired rival Zencity.

Let’s look at what the figures look like for 2023

1. January – 89,554 employees laid off
2. February – 40,021 employees laid off
3. March – 37,823 employees laid off
4. April – 20,014 employees laid off
5. May – 14,928 employees laid off
6. June – 10,958 employees laid off
7. July – 10,589 employees laid off
8. August – 9,545 employees laid off
9. September – 4,632 employees laid off
10. October – 7,331 employees laid off
11. November – 6,956 employees laid off
12. December – 7,159 employees laid off

The Last Bit, the trend of layoffs in the tech industry, indicates the ongoing challenges and transformations within the sector.

Despite initial hopes for a rebound, the persistence of market uncertainties has led tech companies to prioritize efficiency over growth, resulting in continued workforce reductions.