Cisco has reportedly engaged in significant layoffs this week, sweeping numerous business units.
A source told CX Today that the actions – which started on Monday, July 17th – allegedly affected the following business units:
- Cisco Application Centric Infrastructure (ACI)
- Cisco Collaboration
- Cisco Cisco Data Center Services & Solutions
- Cisco Experience Centers (CxC) – Research Triangle Park, N.C. “dissolved”
- Cisco Security Business Group (SBG)
- Cisco Servers – Unified Computing System (UCS)
- Cisco Webex
Cisco has not yet confirmed this, instead providing a statement to CX Today when asked for clarity.
The tech giant stated that the most recent job cuts are a continuation of “the rebalancing effort” announced in November 2022.
As such, the layoffs may include the 4,100 employees Cisco suggested it would let go in December, which equates to approximately five percent of its workforce.
Doubling down on this, Cisco noted:
This is not about cost savings as we have roughly the same number of employees as we did before the process began. This rebalancing is about prioritizing investments in our transformation, to meet and exceed our customers’ expectations in the changing technology landscape.
“We will continue to do everything we can to help place affected employees in open roles and offer extensive support including generous severance packages.”
Despite these assurances, many individuals have taken to Blind – the verified employee community for large tech companies – to have their say.
“Another day, another Cisco layoff,” noted one user.
“Working at Cisco is like gambling at a casino,” wrote another. “Making it to grade 12 without getting laid off is hard.”
Of course, such negativity comes with the territory, and a Cisco engineer gave a more balanced take on LinkedIn.
Many more posts have appeared on the platform in recent days, alongside other platforms like Blind and TheLayoff.com.
While the latter does not provide verified responses, posts seemingly suggest IT support staff in India and Collaboration engineering teams in China have been primarily affected.
Is Cisco Collaboration and Webex Tumbling Down the Priority List?
Despite Cisco’s insistence that the layoffs are a continuation of its November plans, the alleged Webex cuts come after a difficult period for Cisco’s collaboration business.
Indeed, during its most recent earnings call, Cisco revealed steep revenue declines for the business unit that houses Webex.
At the time, Scott Herren, Chief Financial Officer at Cisco, stated:
Collaboration was down 13 percent, driven by declines in collaboration devices and meetings, offset slightly by growth in calling and contact center.
That marked the third successive quarter that collaborations sales dropped, with the plunge diving deeper with each new earnings period.
Such a fall is unsurprising, with Microsoft sucking much of the oxygen from the unified communications market with Teams.
Yet, some analysts have called for a change of tact in how Cisco markets Webex. Zeus Kerravala, Principal Analyst at ZK Research, is one such analyst.
“One of the things it hasn’t done a very good job of is to sell the pallet of hybrid work,” Kerravala told UC Today earlier this year.
“If Microsoft is throwing Teams in as part of its productivity suite, there is no reason why Cisco can’t throw Webex in as companies buy more security and networking software.
They have to figure that out as a way to play that hybrid work angle instead of trying to lead with Webex all the time.
Could these layoffs signal such a transition? Perhaps.
Nonetheless, there are still opportunities for Webex to grow organically. For instance, it still has a significant on-premise contact center base to leverage – which may wish to migrate to Webex CCaaS in time.
Indeed, its cloud contact center platform has received praise from independent research firms – including Aragon Research.
Yet, as Cisco reprioritizes its spending – which likely includes doubling down on its growing network and security businesses – the collaboration portfolio may shift closer to the sidelines.