Cisco To Lay Off Over 4,000 Employees, Shrink Real Estate Footprint
Cisco Systems plans to shrink its real estate footprint and lay off workers, the latest in a series of tech companies that have gone into cost-saving mode.
The San Jose-based digital communications giant plans to cut 5% of its workforce, an expected 4,165 layoffs of the company's 83,300 employees, CoStar reported. This is part of the $600M restructuring plan Cisco announced after it reported sales and revenue fell short of prior expectations.
On Wednesday, Cisco reported on its quarterly earnings call that it had a net income of $2.7B during the three months ending Sept. 30, down from $3B in the same period last year.
The company also said it is planning a consolidation of its real estate footprint but didn't specify which offices would be affected.
Cisco is one of the largest officer occupiers in Silicon Valley, with more than 3.5M SF of leased and owned space in and around its San Jose headquarters, according to CoStar. It also has offices in Austin, Seattle, New York, Denver and dozens of other cities in the country.
"We've got a long tail of small offices distributed around the world that are significantly underutilized, and in fact, unused in some cases," Cisco Chief Financial Officer Scott Herren said in the earnings call.
Last year, Cisco made major real estate moves in the South and Midwest regions. In October 2021, the company announced plans to open a $41M, 80K SF "Talent and Collaboration Center" in Midtown Atlanta.
In August 2021, the company expanded into Downtown Chicago, where it leased 130K SF at the city's Old Post Office redevelopment on the Chicago River, the Chicago Tribune reported.
The trend of layoffs and office cuts in the tech industry has accelerated in recent months, with other major players like Meta, Twitter and Amazon laying off thousands of employees, leading to office space available for sublease reaching record highs.
