By Utkarsh Shetty and Supantha Mukherjee
(Reuters) – Networking giant Cisco plans to restructure its operations, laying off thousands of employees as it seeks to focus on high-growth areas, according to three sources familiar with the matter.
The San Jose, California-based company will have a total of 84,900 employees in fiscal 2023, according to its website.
The company is still deciding the total number of employees who will be affected by the layoffs, one person said.
An announcement could come as early as next week as the company prepares for its Feb. 14 earnings call.
In November 2022, Cisco announced a restructuring during an earnings call that affected about 5% of its workforce, leading to $600 million in severance and other costs.
Cisco declined to comment.
The move would come as technology companies including telecom makers Nokia and Ericsson cut thousands of jobs last year in a bid to cut costs.
Several major technology companies such as Amazon, Alphabet and Microsoft have implemented layoffs in recent weeks.
Cisco had lowered its full-year revenue and profit forecasts in its previous earnings call, in a sign that demand for its networking equipment was slowing.
The company blamed the weakness on a slowdown in orders in the first quarter, saying that “customers are currently focused on installing and deploying products in their environments.”
The company has faced supply chain issues and a post-pandemic demand slowdown in recent years, accelerating its move into software offerings such as cybersecurity.
(Reporting by Utkarsh Shetty in Bengaluru and Supantha Mukherjee in Stockholm; Editing by Chris Reese)