Cisco is preparing to lay off thousands of employees in a second wave of job cuts this year, according to a Reuters report. The networking giant, which already cut 4,000 jobs in February, is expected to announce the new layoffs as early as Wednesday in conjunction with its fourth-quarter earnings report.
The total number of layoffs could be similar to or even exceed the previous round, further pointing to the company’s ongoing transition towards higher-growth sectors like cybersecurity and artificial intelligence (AI).
The move comes as Cisco grapples with declining demand and persistent supply chain challenges in its core business of manufacturing routers and switches, essential components for internet infrastructure. These challenges have prompted the company to diversify its offerings, with a focus on expanding its subscription-based services and AI capabilities.
Earlier this year, Cisco made a bold USD 28 billion acquisition of cybersecurity firm Splunk, aiming to reduce its dependence on traditional hardware sales. The company has also set an ambitious target of generating USD 1 billion in AI-related product orders by 2025 and recently launched a USD 1 billion investment fund for AI startups. Over the past few years, Cisco has made 20 acquisitions and investments in AI-focused companies, including recent investments in Cohere, Mistral AI and Scale AI.
The anticipated layoffs at Cisco are part of a broader trend in the tech industry, where companies are cutting costs in response to significant investments in AI. So far this year, over 1,26,000 employees have been laid off across nearly 400 tech companies, according to data from Layoffs.fyi.
Just this month, chipmaker Intel announced a reduction of 15 per cent of its workforce, or about 17,500 jobs, as it seeks to restructure its struggling manufacturing business.
(Inputs from Reuters)
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