American networking giant Cisco Systems has made a sensational decision by making radical changes in its business strategies. The company has announced major cuts in its global workforce to cope with the current fierce competition in the technology sector, particularly towards new innovations such as artificial intelligence (AI). Company CEO Chuck Robbins sent a memo to employees laying off nearly 4,000 employees. Despite generating record revenues, the company feels that cost containment and reallocation of investments are imperative for future needs. With this move, Cisco is also following the path of tech giants like Meta and Amazon.
Cisco posted impressive growth in its third quarter (Q3). It posted a record revenue of $15.8 billion, up 12 percent from last year. However, management has made it clear that in order to be a winner in the AI ​​era, the company needs to shift its investments towards areas of demand, and for that, it is necessary to reduce staff in certain departments.
Who will be affected?
This will affect less than 5 percent of the workforce of the global workforce of 80,000. Information has been started from May 14 to the affected employees. Although it is not clear which divisions will suffer the most, the cuts are part of the company’s structural changes.
Reasons for dismissal
Apart from cost reduction, the main motive behind this decision is to focus on key strategic areas like silicon, optics, cloud security, increasing use of AI among staff. Cisco intends to reallocate these resources with future growth in mind.
Reassurance to the victims..
Cisco has set aside a $1 billion fund to support those affected by the layoffs. Through this some benefits are provided to the victims. Among them are bonus payments, severance payments and other benefits on pro-rata basis. Apart from that, placement service is provided for finding new jobs. In addition to this, courses will be provided free of charge for a year. CEO Chuck Robbins expressed confidence that while these changes may be difficult temporarily, they will strengthen the company in the long term.
