2022 11 Cisco Systems 01

Cisco eyes restructuring, job cuts, severances, real estate trims

SAN JOSE — Cisco, a San Jose technology stalwart, revealed Wednesday it is looking at layoffs and layoffs to help “rebalance” its workforce, a potentially unsettling plan that includes shedding real estate.

The network giant did not say specifically if or when it would eliminate jobs as part of the rebalancing efforts. But the company did disclose in a regulatory filing with the Securities and Exchange Commission that it will incur hundreds of millions of dollars in costs to cover the costs of restructuring the company.

“Cisco announced (on Nov. 16) a restructuring plan to rebalance the organization and enable further investment in key priority areas,” the company said in the SEC filing. “This rebalancing will include talent movement options and restructuring.”

The tech titan estimated it would have to take charges of $600 million to cover a variety of initiatives stemming from the restructuring, Cisco said in the SEC filing.

The company has already shed real estate in the area of ​​its north San Jose headquarters. More real estate cuts could emerge, the regulatory filing indicates.

“Cisco will optimize its real estate portfolio, aligned with the broader hybrid operating strategy,” Cisco said in the SEC filing.

The company owns a large real estate portfolio in the Bay Area, almost all of it north of San Jose.

“Cisco currently estimates that it will recognize pre-tax charges to its … financial results of approximately $600 million consisting of severance and other one-time termination benefits, property-related charges and other costs,” the technology company said.

The restructuring program could start soon, possibly within weeks or a few months.

“Cisco will take action under this plan beginning in the second quarter of fiscal 2023,” the company said. Cisco’s fiscal second quarter began around November 1 this year and would be completed around January 31, 2023.

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