California-based Cisco Systems Inc plans to lay off about 14,000 employees, representing nearly 20 percent of the network equipment maker’s global workforce, technology news site CRN reported, citing sources close to the company. The company is expected to announce the cuts within the coming few weeks. Cisco is moving from a hardware-based organization to a software-centric firm and claims to have more than 70,000 employees as of April 30.
Cisco increasingly requires “different skill sets” for the “software-defined future” than it did in the past, as it pushes to capture a higher share of the addressable market and aims to boost its margins, the CRN report said citing a source familiar with the situation.
Cisco has been investing in new products such as data analytics software and cloud-based tools for data centers, to offset the impact of sluggish spending by telecom carriers and enterprises on its main business of making network switches and routers.
The company has already offered many early retirement package plans to Cisco’s employees, according to CRN.
Up until Tuesday’s close of $31.12 on the Nasdaq, the company’s stock had risen about 15 pe rcent this year, compared with a 10.5 percent increase in the Dow Jones US Technology Hardware & Equipment index.