Cisco Layoffs 2024: What you need to know about the latest job cuts at CSCO

Cisco (NASDAQ:CSCO) are among the large-cap tech stocks that investors might not necessarily pay as much attention to as, say, others in the so-called “Magnificent Seven.” However, the company is enjoying significant attention today, with Cisco’s latest round of layoffs set to take place soon.

This latest round of layoffs will affect at least 4,000 employees. The company is expected to make the official announcement in its upcoming quarterly earnings report, which is scheduled for tomorrow.

With many tech companies announcing layoffs and focusing on efficiency, investors are finding these headlines easier to understand. CSCO shares were up just under 1% in early afternoon trading today. This suggests that investors generally view the move as a net positive for the company.

Let’s see what to make of this news today and what it could mean for Cisco shareholders.

The Cisco layoffs will affect more than 4,000 employees

Efficiency is everything these days, and tech companies everywhere that may have bloated during post-pandemic hiring are clearly pulling back.

That said, Cisco’s latest round of job cuts is pretty big. With 4,000 or more employees likely to be affected, it’s unclear what the cost to the company (and investors) will be. The company’s latest round of cuts is estimated to have cost about $800 million in severance and termination benefits. So we’re likely to see another bill sent to investors with this round of cuts.

The question is whether the company will end up being well-positioned to maintain its growth trajectory with this lower headcount, or whether the company will end up hiring back many of the employees it laid off. Time will tell. However, given Cisco’s current headcount of approximately 85,000, this reduction will amount to less than 5% of the total workforce. It’s still significant, but perhaps not as big of a problem as many initially think.

I think that’s why CSCO shares are on this news today. We’ll have to see how earnings come in tomorrow and whether these cuts may portend weakness in future numbers. For that reason alone, I would be cautious about Cisco in this report.

At the time of publication, Chris MacDonald did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

At the time of publication, the responsible editor had (either directly or indirectly) no position in the securities mentioned in this article.