Cisco to axe 5,500 jobs in bid to '˜drive growth'

Technology giant Cisco, which employs about 150 people in Scotland, is to slash 5,500 jobs from its global workforce.

Cisco is to axe 5,500 jobs around the globe. Picture: Justin Sullivan/Getty Images

The cutbacks – equivalent to about 7 per cent of the group’s global headcount – come as it looks to shift from a hardware business to one more focused on software and cloud technology.

“We are committed to making the necessary decisions to drive our future growth,” said Cisco chief executive Chuck Robbins. He promised to use the money saved from trimming its workforce to invest in areas where it believes it can boost sales in the future.

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Cisco launched its UK operations in 1992 and employs around 5,000 people in 14 towns and cities across the country. As well as its sites in Edinburgh and Motherwell, it has bases in London, Hampshire and Manchester. The California-based firm has about 74,000 employees worldwide.

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The California-based company’s headcount has already been cut by about 3,200 over the past two years, mostly due to restructuring and workforce reduction plans announced in 2013 and 2014. However, recent announcements appear to point to UK expansion.

Last summer, Cisco committed to investing about £760 million in UK digital education and skills projects over the following three to five years.

In December, it opened new offices in central London to house some 200 workers in cloud technology, adding it planned to expand its operations in the city threefold by 2017.

It followed the acquisition of two private UK companies, Acano and Portcullis, involved in conferencing software and cyber security services. In 2000, Cisco bought Cumbernauld-based software company Atlantech in a deal worth more than £100m. At the time the takeover was one of the biggest technology deals ever done in Scotland.

The cuts are the latest in a string of reductions at some of the biggest names in the technology sector during the past year.

Intel announced 12,000 cuts earlier this year. Hewlett-Packard shed 30,000 last year and Microsoft saw around 7,800 positions go.

More than 84,000 people are currently employed in Scotland’s digital technology sectors in roles including software development, data, telecoms and cloud services. It is estimated that the industry requires an additional 11,000 individuals each year to fill digital technologies jobs.