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Cisco Systems Inc., one of the world’s leading companies in computer networking equipment, recently made a startling announcement: the company plans to cut thousands of job positions. This decision has taken many by surprise, given Cisco's prominent role in the tech industry and its reputation for innovation and growth. 

The move reflects broader trends in the market and raises questions about the company’s future direction and its commitment to maintaining a competitive edge in an ever-evolving landscape. As the technology sector faces various challenges, including economic pressures and changing demand, this Cisco's decision highlights the complexities of navigating this environment while striving to remain a leader in networking solutions.

Known since 1984, Cisco has been a pioneer in networking solutions, including routers, switches, and security software, and plays an important role in communication and collaboration in the digital age.

Second Layoff in 2024: The Reasons and Impacts

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This time, Cisco is carrying out its second round of layoffs in 2024, which will affect around 4,000 positions. This decision was made in response to the sales challenges faced by the company, due to a slowdown in technology spending from corporate customers. And it reflects the changing and increasingly competitive market dynamics.

The layoffs are believed to be part of Cisco's efforts to adapt to volatile market conditions. Although the exact number of employees affected has not been disclosed, the impact of this move is certain to be considerable.

The impact of layoffs announced by Cisco can be felt in several aspects, both for employees affected by layoffs and the impact of employees who are still working, as well as the impact on the company as a whole.

Support for Employees Affected by this Layoff

For affected employees, Cisco is committed to providing support during this transition. They will receive a fair severance package, according to their length of service and position. In addition, Cisco also provides various support programs, including:

-Training and Development: Training sessions to help them update their skills to be better prepared for the changing world of work.

-Career Consulting: Access to career consultants who are ready to help build resumes, prepare for interviews, and explore new opportunities.

-Alumni Network: A program for former employees to share information about openings and support each other.

To date, this situation has also raised concerns among current employees about their job stability. Stress and uncertainty can affect morale, so it is important for this company to maintain good communication during this period.

Sales Estimates and Financial Impact

Cisco’s market graphic from 2015-2024. Source: bloomberg

Cisco also projected sales for its fiscal third quarter, ending in April, to be between US$12.1 billion and US$12.3 billion. This figure is lower than the average estimate of analysts, who expect sales to reach US$13.1 billion. The costs associated with the layoffs are expected to be around US$500 million.

With a total of nearly 85,000 employees, these cuts are expected to affect about 5% of Cisco's workforce. This move is part of Cisco's ongoing strategy to improve operational efficiency amid the economic challenges faced by the technology industry.

Cisco's Commitment Amidst Challenges

Despite these difficult times, Cisco remains committed to adapting to market needs and continuing to innovate. The company hopes that this restructuring step will strengthen its position in the global technology industry and create new opportunities in the future. Cisco, as a leader in network solutions and communications technology, is determined to continue to provide added value to customers and all stakeholders.

Conclusion

This cut of around 4,000 jobs by Cisco is the second cut made after the first cut occurred in February 2024, which aims and is believed to increase operational efficiency. Cisco is also committed to supporting affected employees with severance packages and job search programs, but this news still raises concerns among employees who are still working about their job security.

With lower than expected sales projections for the coming quarter, Cisco hopes this restructuring will make it more competitive. Despite the challenges, Cisco remains focused on innovation and wants to continue to provide value to customers and stakeholders in the future.

Disclaimer

The information in this article about Cisco Systems Inc. and its job cuts is based on publicly available sources. While we aim for accuracy, we cannot guarantee the completeness or timeliness of the details. This article is for informational purposes only and should not be considered financial or employment advice. Readers are encouraged to check official company announcements for the latest updates on Cisco's operations and workforce changes.

References: 

https://www.bloombergtechnoz.com/detail-news/29786/efek-bisnis-melambat-cisco-phk-4-000-karyawan/2