Cisco eyes restructuring, job cuts, severances, real estate trims, San Jose tech giant says

SAN JOSE — Cisco, a San Jose tech stalwart, revealed Wednesday it is eyeing terminations and severances to help “rebalance” its workforce, a potentially wrenching plan that includes shedding real estate.

The networking giant didn’t specifically state whether or when it would eliminate jobs as part of the rebalancing quest. But the company did disclose in a regulatory filing with the Securities and Exchange Commission that it would incur hundreds of millions of dollars in charges to cover the cost of the restructuring of the company.

“Cisco announced (on Nov. 16) a restructuring plan in order to rebalance the organization and enable further investment in key priority areas,” the company stated in the SEC filing. “This rebalancing will include talent movement options and restructuring.”

The tech titan estimated it would have to take charges of $600 million to cover an array of initiatives arising from the restructuring, Cisco stated in the SEC filing.

The company has already been shedding real estate in the area of its north San Jose headquarters. More property cutbacks may loom, the regulatory filing indicates.

“Cisco will optimize its real estate portfolio, aligned to the broader hybrid work strategy,” Cisco said in the SEC document.

The company owns a vast real estate portfolio in the Bay Area, nearly all of it in north San Jose.

“Cisco currently estimates that it will recognize pre-tax charges to its … financial results of approximately $600 million consisting of severance and other one-time termination benefits, real estate-related charges, and other costs,” the tech company said.

The restructuring program could begin in short order, potentially within weeks or a few months.

“Cisco will take action under this plan beginning in the second quarter of fiscal 2023,” the company stated. Cisco’s fiscal second quarter began around Nov. 1 of this year and would be concluded around Jan. 31 of 2023.