According to media reports, Cisco started a new round of layoffs this week and will ultimately cut hundreds of employees.
Cisco confirmed the layoffs but would not say how many employees or which business groups were hit. “Over the last several years, we have been transforming Cisco to deliver even greater value to our customers,” a Cisco spokesperson said in an email to SDxCentral. “We continue to make decisions to ensure that our investments and resources are aligned with strategic growth areas of the business.”
ACG Research CEO Ray Mota said he’s not surprised by the layoffs. “Chuck the CEO hasn’t been shy about making tough decisions and changes, which I think is good,” Mota said. In recent years Cisco has pivoted from a traditional hardware company to cloud and software and a subscription-based model rather than perpetual licenses.
“When you do that, it’s great for Wall Street because you get longer-term, predictable revenue,” Mota said. “But in the short term, you don’t incur as much cash. Other companies have done it like Adobe and IBM, and it’s worked well. Overall it’s a tough decision, but it will be great for investors.”
Besides these layoffs, Cisco has seen the exit of several senior-level executives this year. In the summer, Christine Heckart, a marketing executive, and Yvette Kanouff, Senior Vice President and General Manager of Cisco’s service provider business, both left their positions. Hilton Romanski moved on from his job in September as Cisco’s Senior Vice President and Chief Strategy Officer. Last month David Ulevitch, who had been working in an advisory role, announced he was leaving to join venture capital firm, Andreessen Horowitz.
Cisco’s Q4 revenue was up 6%, or $12.8 billion, year over year. Revenue in the fiscal year 2018 was $49.3 billion, accounting for a 3% year-over-year increase.