Future Tech

C-suite execs not immune to downsizing drama at Cisco

Tan KW
Publish date: Thu, 22 Feb 2024, 07:41 AM
Tan KW
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Future Tech

It isn't just the little people that switch and router Goliath Cisco is erasing from its ranks in the latest cost-cutting exercise - at least one person in the C-suite is getting the boot too.

As revealed last week, Cisco is chopping around 5 percent of its global workforce, which equates to around 4,250 employees, to counter a slowdown in customer orders, and this action will incur pre-tax charges of roughly $800 million.

In the latest filing with the SEC [PDF] deposited by the tech giant last night, Cisco says: "We announced a restructuring plan in order to rebalance the organization and enable further investment in key priority areas."

The thousands of people earmarked for redundancy are scheduled to have left the organization by the first half of Cisco's 2025 - and among them will be Maria Martinez, chief operating officer since May 2021.

The filing says that "as part of organizational changes with respect to Cisco's executive leadership team, Cisco informed Maria Martinez, Cisco's Executive Vice President and Chief Operating Officer ('COO'), that the COO position currently held by Ms Martinez has been eliminated.

"Accordingly, Ms Martinez will remain employed with Cisco until May 15, 2024. This change is due to aligning the Operations and Customer Experience organizations directly to the Chief Executive Officer and eliminating the COO role."

Prior to Cisco, Martinez held a series of senior roles at Salesforce until 2018, when she was president of Global Customer Success and GM of the Latin America ops. Even further back she was corporate veep of Microsoft services. Martinez remains on the boards of various institutions including the Silicon Valley Foundation, and corporations such as McKesson and Cue Health.

Cisco boss Chuck Robbins said on LinkedIn of the outgoing exec: "As Cisco moves into a new chapter with the pending Splunk acquisition, Maria will take on her own next chapter where she can spend more time with her family and pursue other interests."

He added: "Maria has been instrumental in accelerating Cisco's business transformation strategy of driving more software and subscriptions and has achieved many of the objectives she set out to achieve when she joined Cisco. As COO, she oversaw some of the most complex industry and global issues including the supply chain crisis, security vulnerabilities, international conflict, and a pandemic."

Cisco is still feeling the effects of the pandemic on the supply chain as customers that held out for stock are still digesting what they've bought amid delayed projects. Some have "in excess of 20-plus weeks of inventory that they're working through right now," said the CEO last week.

Robbins added: "In terms of the macroenvironment, we are seeing a greater degree of caution and scrutiny of deals given the high level of uncertainty. As we're hearing this from our customers, it's leading us to be more cautious with our forecast and expectations."

Some 41,793 people working in the tech industry so far this year have been laid off, far lower than the same time a year ago. Around 90,000 had lost their job by the end of January 2023. This was mostly related to tech firms hiring heavily during the early years of the pandemic, and then finding that commercial reality didn't match costs last year.

Meta boss Mark Zuckerberg said this week he thinks generative AI is not the main cause of continued job losses, and the situation is more that companies are still cutting their cloth.

In truth, Meta could have afforded to keep on those 22,000 people it chopped in 2023, given that the corporation made $23.2 billion in net income [PDF], up 69 percent from the prior year. However, those job losses delighted investors, the share price soared, and Zuck's personal wealth went along for the ride. ®



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