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Cisco to cut one-fifth of its global workforce

Company reportedly plans to cut up to 14,000 jobs as it shifts focus from networking hardware to software and cloud-based systems

Cisco Systems is reportedly planning to cut its global workforce by as much 20% as it shifts its strategic focus to networking software and cloud technology.

The company will lay off up to 14,000 employees around the world, one-fifth of its total workforce, reports technology news site CRN, citing sources close to the company.

The biggest single layoff in the company’s history comes as the organisation restructures in an attempt to remain competitive in an era of software-defined networking, which has enabled companies to use less expensive commodity switches and have more control over network traffic flow than ever before.

The switch in focus means Cisco needs different skillsets for a software-defined future than the company gathered in the past to capture a share of the traditional networking market.

Analysts said fewer employees are required in the back-end process as many of Cisco’s customers move to the cloud.

As part of this transition, the company has begun investing in new software products, including data analytics tools and cloud-based tools for datacentres.

Cisco, which is expected to announce the job cuts within the next few weeks, has already offered retirement package plans to staff, according to CRN’s sources. 

The company, which will announce its latest quarterly financial results on 17 August 2016, has declined to comment on the job losses.

Cisco has a history of announcing job cuts at this time of the year, having announced an 8% cut in its workforce in August 2014, a 5% cut in August 2013, 2% in July 2012 and 9% in July 2011.

Read more on Software-defined networking (SDN)