Cisco Systems plans to lay off around 7 per cent of its global staff, around 6,000 people, as the IT behemoth refocuses its efforts on high-growth sectors like artificial intelligence (AI) and cybersecurity. The statement, issued on Wednesday, represents the company's second substantial round of job layoffs this year.
Cisco's move to reduce its personnel is part of a larger reorganisation strategy aimed at investing in important growth areas and increasing company efficiency. The corporation reported a 10 per cent drop in quarterly revenue to USD 13.64 billion, although it still exceeded market forecasts of USD 13.54 billion.
The anticipated job losses, which follow the removal of 4,000 posts in February, are projected to result in pre-tax expenses totalling up to USD 1 billion. Approximately USD 700 to 800 million will be recorded in the first quarter of fiscal 2025. The employment decrease is part of a strategic move aimed at capitalising on emerging technologies such as artificial intelligence and cybersecurity.
Chuck Robbins, Cisco's CEO, voiced optimism about the company's future despite the layoffs. "Inventory digestion is complete, and we're now returning to a more normalised demand environment," Robbins stated in a conference call with analysts.
Cisco announced a USD 1 billion investment in AI start-ups in June and recently paid USD 28 billion for cybersecurity firm Splunk. The corporation is also revamping its operations, combining the networking, security and collaboration divisions into a single organisation. This move is expected to increase efficiencies and direct resources towards growth areas.
Cisco expects first-quarter revenue of USD 13.65 billion to USD 13.85 billion, beating analyst expectations.
