In a second round of redundancies this year, Cisco, a U.S. networking equipment manufacturer, will eliminate thousands of positions as it transitions to higher-growth sectors
These include AI and cybersecurity, according to sources familiar with the matter.
The sources, who were not authorized to speak publicly, indicated that the number of individuals affected may be comparable to or slightly greater than the 4,000 employees Cisco terminated in February. The announcement will be made as early as Wednesday with the company’s fourth-quarter results.
In February, Cisco, headquartered in San Jose, California, announced an employment reduction. Reuters was the first to report on the matter.
According to its annual filing, the organization employed approximately 84,900 individuals as of July 2023.
The February layoffs are not included in that figure.
Cisco did not promptly address a request for comment.
The initial report of the cuts by Reuters resulted in a nearly 1% decline in the company’s shares. As of Thursday’s close, the stock had declined by more than 9% this year.
Sluggish demand and supply-chain constraints have challenged Cisco, the world’s largest manufacturer of routers and switches that manage internet traffic.
This has necessitated the company to diversify its operations, as evidenced by its $28-billion acquisition of cybersecurity firm Splunk in March. The acquisition will decrease its dependence on one-time equipment sales by increasing its subscription business.
The company has been striving to integrate AI products into its product line and reaffirmed its goal of generating $1 billion in AI product orders by 2025 in May. In June, it established a $1 billion fund to invest in AI ventures, including Scale AI, Mistral AI, and Cohere.
At that time, the organization disclosed that it had executed 20 AI-related investments and acquisitions over the previous few years.
The most recent redundancies result from the technology industry’s efforts to reduce costs to compensate for substantial investments in artificial intelligence this year.
According to data from the monitoring website Layoffs.fyi, over 126,000 individuals have been terminated from 393 technology companies since the beginning of the year.
In August, Intel, a chipmaker, reduced its personnel by more than 15%, or approximately 17,500 individuals, to revitalize its manufacturing business, which was experiencing financial losses.
