ISLAMABAD, AUGUST 12: According to sources familiar with the subject, Cisco plans to let off thousands of workers in a second round of layoffs this year as the US networking equipment giant focuses on higher-growth sectors like cybersecurity and artificial intelligence.
According to unnamed individuals who were not authorized to talk publicly, the number of impacted employees may be comparable to or somewhat greater than the 4,000 workers that Cisco let go in February. The announcement is expected to be made as early as Wednesday along with the company’s fourth-quarter results.
Prior to the company’s announcement in February, San Jose, California-based Cisco made a job reduction, which Reuters exclusively disclosed. According to their annual report, as of July 2023, the corporation employs about 84,900 workers. The amount does not include the layoffs that occurred in February. An inquiry for comment from Cisco was not immediately answered.
Soon after Reuters broke the news of the layoffs, its shares dropped by about 1%. As of Thursday’s closing, the stock had lost more than 9% of its value this year. The biggest manufacturer of internet traffic-directing routers and switches, Cisco, has been struggling with slowing demand and supply-chain issues in its core business.
Due to this, the business has been forced to diversify through actions like its $28 billion acquisition of cybersecurity startup Splunk, which it carried out in March. The purchase will increase its subscription business and lessen its reliance on one-time equipment sales. The business has been attempting to include AI goods in its portfolio, and in May it reaffirmed its goal of having $1 billion worth of orders for AI products by 2025.
It established a $1 billion fund in June with the aim of funding AI firms including Scale AI, Mistral AI, and Cohere. At the time, the business claimed to have completed 20 investments and acquisitions with an AI focus in the previous several years. The tech sector, which has been reducing expenses this year to counterbalance significant expenditures in AI, has just announced layoffs.
Data from monitoring website Layoffs shows that since the year’s beginning, 393 tech businesses have laid off almost 126,000 workers. Chipmaker Intel made over 15% of its personnel, or around 17,500, layoffs earlier in August in an effort to turn around its manufacturing division, which was losing money.
