Cisco, a leading U.S. networking equipment manufacturer, is set to undergo a second significant round of layoffs this year, as it pivots its focus towards high-growth areas such as cybersecurity and artificial intelligence (AI). According to sources familiar with the matter, the company plans to cut thousands of jobs, with the number of affected employees potentially matching or surpassing the 4,000 laid off earlier in February. The official announcement is expected to coincide with the release of the company’s fourth-quarter results, likely as early as Wednesday.
.@roger_lee of @Layoffsfyi says tech companies are increasingly citing AI as the reason for rising layoffs https://t.co/NA0uZVdWWl pic.twitter.com/Ffl6gSRxJK
— Bloomberg TV (@BloombergTV) August 9, 2024
This latest round of layoffs follows a similar reduction in February, which was reported exclusively by Reuters prior to Cisco’s official announcement. As of July 2023, Cisco employed approximately 84,900 people, a figure that does not reflect the February job cuts. The company has yet to respond to requests for comment on the upcoming layoffs. Following the news of the cuts, Cisco’s shares fell nearly 1%, adding to the stock’s over 9% decline for the year as of Thursday’s close.
Cisco, recognized as the largest manufacturer of routers and switches that direct internet traffic, has faced challenges in its core business due to slowing demand and ongoing supply-chain issues. These challenges have prompted the company to diversify its offerings and reduce its reliance on traditional equipment sales. One of its major moves in this direction was the $28-billion acquisition of the cybersecurity firm Splunk, finalized in March. This acquisition is expected to enhance Cisco’s subscription-based business model, providing a more stable revenue stream.
🔵 EXCLUSIVE-CISCO TO LAY OFF THOUSANDS MORE IN SECOND JOB CUT THIS YEAR, SOURCES SAY
Full Story → https://t.co/N4Bh8X9HcI
Cisco will cut thousands of jobs in a second round of layoffs this year as the U.S. networking equipment maker shifts focus to higher-growth areas,… pic.twitter.com/esxjxaXzFG
— PiQ (@PiQSuite) August 9, 2024
In addition to expanding its cybersecurity footprint, Cisco has been integrating AI into its product lineup. In May, the company reaffirmed its goal of securing $1 billion in AI product orders by 2025. To further support its AI ambitions, Cisco launched a $1-billion fund in June to invest in AI startups such as Cohere, Mistral AI, and Scale AI. Over the past several years, Cisco has made 20 AI-focused acquisitions and investments, reflecting its commitment to staying competitive in the rapidly evolving tech landscape.
🚨 LAYOFF ALERT – 🇺🇸
Cisco Systems Inc. plans to cut thousands more jobs in a second round of layoffs this year, following a slowdown in corporate tech spending that impacted its sales growth. About 4,000 jobs will be affected, as previously announced in February. pic.twitter.com/oHw7KKhm58
— The Layoff Tracker 🚨 (@WhatLayoff) August 9, 2024
The layoffs at Cisco are part of a broader trend in the tech industry, where companies are cutting costs to balance the substantial investments being made in AI. According to data from Layoffs.fyi, more than 126,000 employees have been laid off across 393 tech companies since the beginning of the year. Notably, earlier in August, chipmaker Intel cut over 15% of its workforce—around 17,500 people—as it struggled to turn around its loss-making manufacturing business.
Major Points:
- The company plans to cut thousands of jobs, potentially exceeding the 4,000 layoffs from February, with an announcement expected alongside its fourth-quarter results.
- Cisco is focusing on high-growth areas like cybersecurity and AI to offset sluggish demand in its traditional networking equipment business.
- The $28-billion acquisition of cybersecurity firm Splunk in March is part of Cisco’s strategy to boost its subscription-based business and diversify revenue streams.
- Cisco is committed to AI growth, launching a $1-billion fund for AI startups and setting a target of $1 billion in AI product orders by 2025.
- Cisco’s layoffs are part of a broader trend, with over 126,000 employees laid off across 393 tech companies this year as the industry navigates significant investments in AI.
Conner T – Reprinted with permission of Whatfinger News
