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Cisco layoffs mark Customer Experience restructuring

Cisco is laying off hundreds of employees as it restructures its Customer Experience unit led by new-hire Maria Martinez. The Cisco layoffs come the week before its Partner Summit.

Cisco is laying off hundreds of employees as part of a restructuring to increase the speed of its transition to...

becoming more of a software and services company than a network hardware maker.

Cisco confirmed this week there have been layoffs, but did not provide the number or details on where in the company they took place. However, documents filed with the state of California said the company would give pink slips to 405 employees at its San Jose, Calif., headquarters and 57 workers at its Milpitas, Calif., offices, the Silicon Valley Business Journal reported. The Cisco layoffs started on Monday -- a week before the Cisco Partner Summit in Las Vegas.

Other media reported the majority of the layoffs were in the company's Customer Experience (CX) unit, which is led by recently hired Maria Martinez. Martinez, a former executive at Salesforce and Microsoft, is in charge of guiding customers through Cisco's transition to a business that generates the majority of its revenue from network and security software subscriptions. Martinez reports directly to Cisco CEO Chuck Robbins.

Maria Martinez, Cisco chief customer experience officerMaria Martinez

Cisco acknowledged there were layoffs planned, as the company continued to restructure its operations. The CX unit plays a significant role in that reorganization.

"Over the last several years, we have been transforming Cisco to deliver even greater value to our customers," the company statement said. "We continue to make decisions to ensure that our investments and resources are aligned with strategic growth areas of the business."

Analyst says Cisco layoffs expected

Glenn O'Donnell, an analyst at Forrester Research, said the number of layoffs was "nothing alarming," given that Cisco's global workforce is about 70,000.

"These waves come and go in the classic tech giants, as they continue to tweak staff in their pursuit to refine their business," O'Donnell said.

Cisco's "aggressive effort" to rebuild its CX organization will require staff changes, O'Donnell said.

"Cisco is doing fairly well, but [Robbins] still has a lot of work to do to turn Cisco into a different company," O'Donnell said. "He has a brutally tough job. Even after a few years at the helm, the job is far from done."

Cisco has shown progress in its transition. In August, the company reported revenue of $12.8 billion in the quarter ended July 28, a 6% increase from the same period a year ago. Application sales rose 10% and recurring revenue -- a reflection of sales in software subscriptions and services -- accounted for 32% of total revenue, a point higher than the same period last year.

Cisco said it would let some laid-off employees apply for newly created CX jobs "where there's a skills match." Also, Cisco has more than 3,800 job openings globally and could offer some laid-off workers positions in other areas.

Since 2016, Cisco has made roughly 7,000 job cuts.

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What's the impact of Cisco's restructuring on your business?
Martinez and Robbins are a long line of misguided so called senior executives who know nothing more than to cut jobs to look good to investors and the board. This is the biggest senior executive sham in existence today and it travels from one giant company to the next (ie Kodak, Xerox, B&L, ETC, ETC) without any consideration for the employee. Big shot executives are still raking in big bucks as the all knowing and continue to disguise there inability to lead correctly. This style of management effects everyone and the board members should wake up when they see there executive management suggesting huge cut backs in order to save there inability to manage effectively for the sake of the employee. Martinez and Robbins need to be held accountable for the lack of planning and leading causing these poor souls to loose there jobs before the holidays and year end. Cisco should be ashamed at the way they are treating good employees. Potential customers should cancel there orders as a wake up message to the big money makers Martinez and Robbins.
You were given the position to grow the business but grow it in the way of creating jobs not increasing your paycheck over the loss of others. Shame on you for calling yourselves executive leaders. If the board members have any sense of leadership they would stand up for the worker and send the message to Martinez and Robbins to come up with a better plan that saves jobs. Hold these 2 responsible for poor management and demonstrate to the dedicated employee a sign that they are hear for them and together you all can work it out.......Happy Holidays 

Cisco are you up for the challenge????
Hi, thanks for your comments. I have no facts that would establish the reason for Cisco's layoffs. However, in general, tech companies will lay off workers and hire new ones rather than retrain people for new jobs. Also, layoffs are a quick way to cut older employees, who typically earn more money than new hires. As to Cisco CEO Robbins, by today's standards, his compensation is respectable, but not astronomical. When he became CEO in 2015, his salary was $1.15 million with a potential bonus of $2.6 million. He also received $13 million in stock -- mostly in performance-based restricting stock units. Now, you could argue that CEOs in general are overpaid and their compensation isn't always in line with their performance, but that's a separate argument.  
I think what's missing here is that Cisco is also doing a lot of hiring. The Customer Experience organization has hired hundreds of people over the past year and are hiring more. Cisco acquires a lot of companies, so it has lots of redundant people and are eliminating jobs but the larger strategy there is to reallocate headcount to where it makes more sense.