Layoffs on Cisco’s Fall Menu?

Cisco reports earnings after the markets close today, but they’re already in the morning headlines for what they might say.  Multiple reports that seem to derive from one by CRN yesterday suggest that Cisco is preparing to reduce its headcount by 14,000 employees worldwide.  

Now that would be a big move by any measure, representing some 20% of the company’s current workforce.  If true, it would be more than three times as big a move as they made two summers ago.   Just what combination of early retirements, buyouts, and outright layoffs would make up that sort of number is unclear, but there’s no way it could be anything but painful.

The suggestion is that Cisco is about to pivot towards software, de-emphasizing the hardware side.  Now, like two years ago, they’ve been steadily expanding through acquisition for many quarters as the market shifts rapidly under their feet.  It certainly feels like it could be time for them to make a big move, but I do hope that CRN is wrong about the size this time.  Or, if they’re right, it’s because Cisco will reduce headcount by doing something like spinning off a business or two with many of those jobs still intact.

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