After Intel and IBM, the well-known U.S. tech giant Cisco’s second wave of layoffs has landed. It is reported that in the future, most of Cisco’s overall business may be transferred to India or Japan.
According to reports from Phoenix Finance, from various sources, it is understood that Cisco’s second wave of layoffs for the year has been implemented. On September 19, several Cisco employees in Dalian disclosed that they officially received layoff notices that day, with an expected layoff of about 300 regular employees in Dalian. The compensation package includes two options: one is to choose immediate resignation and receive a “N+7” compensation package, and the other is to choose delayed resignation for two months and receive a “N+5” compensation.
An employee at Cisco revealed, “The news of layoffs has been circulating since the Mid-Autumn Festival. On the 19th, the HR department at headquarters talked to many employees and held farewell dinners. Some departments disappeared directly. Some project teams laid off 3 out of 20 people, and more layoffs are expected to follow.”
One Dalian employee who has not been laid off temporarily said, “I am currently safe, but there is still a sense of anxiety among us.”
A family member of a Cisco regular employee said, “As far as I know, Cisco is globally undergoing layoffs, with the current round mainly affecting around 300 employees in the blue-badge Japanese and Korean projects, including technical support positions. Red-badge layoffs may also happen soon, possibly within the next three months.”
According to sources, blue-badge refers to Cisco regular employees, while red-badge refers to Cisco non-regular employees under contracts with third-party companies. This round of layoffs in Dalian involves around 300 Cisco employees, and the remaining employees may also be laid off gradually.
An insider said that rumors of layoffs had been circulating internally, and it was officially confirmed on the 19th. This is Cisco’s second wave of layoffs this year, affecting around 300 employees. The employees involved in this round of layoffs are related to Japanese and Korean language projects.
Regarding compensation, a former Cisco employee in Shanghai said, “The N+7 compensation is already quite humane. Many colleagues who worked at Cisco for over a decade traveled around with their compensations after being laid off.”
Cisco focuses on markets such as the Internet of Things, domain security, video conferencing, and energy management and has branches in over 140 countries worldwide.
Cisco entered the Chinese market in 1994, and its Shanghai R&D center was officially opened in October 2005. In January 2010, Cisco announced the establishment of the Greater China region.
In February of this year, Cisco had already reduced approximately 4,000 employees. This global layoff is the second round announced by Cisco in August this year, with around a 7% reduction. According to media reports, Cisco currently employs around 90,400 people, meaning that this round of layoffs will eliminate over 6,300 job positions.
Chinese media outlets like Jiemian News and Jinrongjie have also reported on the above news. The layoffs at Cisco have attracted wide attention and have become a hot topic.
As for this round of layoffs, Cisco’s official explanation is that the layoffs will enable the company to invest in growth opportunities and streamline its operations. An informed source told Phoenix Finance, “Cisco spent over 20 billion dollars acquiring Splunk, and the funds didn’t come through, so they had to initiate layoffs.”
This year marks the 30th year since Cisco entered the Chinese market. At the 2024 China AIGC Innovation Development Forum held in September, Dong Yuling, Vice President of Cisco Greater China, publicly stated that in the past 40 years, Cisco has acquired nearly 300 companies, with its most significant acquisition being last year’s $28 billion acquisition of Splunk, focusing on its security and data capabilities.
Apart from acquisitions, Cisco’s layoff plan might be related to its declining performance.
According to Cisco’s fourth quarter report for the 2024 fiscal year, Cisco expects its revenue for the 2025 fiscal year to range between 55 to 56.2 billion dollars, with an average outlook of 55.5 billion dollars, falling short of analyst expectations.
Additionally, Cisco’s fourth quarter net revenue was 13.642 billion dollars, a 10% year-over-year decrease; net profit was 2 billion dollars, a 45% year-over-year decrease; and the total revenue and net profit for the 2024 fiscal year decreased by 6% and 18% respectively compared to the previous year, marking Cisco’s first revenue decline since 2020.
This year, more and more tech giants have joined the layoff trend. IBM closing its Chinese research department led to over 1,000 job losses; Intel announced the layoff of 15,000 employees to achieve a 10 billion dollar cost-saving plan; while Apple, to refocus on AI development, laid off 100 service department employees.