Cisco Cuts Thousands Of Jobs In Second Major Layoff Of 2024

Tech giant Cisco has undertaken second round of layoffs after a previous reduction of 4,000 positions earlier this year, the company is now eliminating approximately 5,600 additional roles. This move comes as Cisco grapples with declining demand and a pressing need to curtail costs, even as it invests heavily in emerging technologies like artificial intelligence (AI).

The layoffs are part of a broader restructuring plan that is expected to incur up to USD 1 billion in costs, with a substantial portion of these expenses anticipated to be recorded in the first quarter of the fiscal year. Cisco’s workforce, which stood at around 85,000 employees at the end of the last fiscal year, is being streamlined to align with the company’s shifting focus towards high-growth areas.

In a bid to pivot towards the future, Cisco has committed USD 1 billion to fund AI startups, reinforcing its strategic shift away from its traditional networking hardware towards advanced AI capabilities. The company’s recent acquisition of cybersecurity firm Splunk for USD 28 billion is a significant move into subscription-based services, positioning Cisco to compete in the crowded cybersecurity market alongside industry leaders such as Palo Alto Networks and Microsoft.

The tech sector as a whole has faced a challenging year, with over 1,36,000 job cuts reported across 422 companies. Major players like Intel, IBM and Cisco have all made substantial reductions in their workforces. Cisco’s focus on AI and cybersecurity reflects broader industry trends as companies adapt to new technological demands and market conditions.

In addition to its layoffs and acquisitions, Cisco has been active in the AI space, with notable investments in companies like Cohere, Mistral AI and Scale AI. Its partnership with Nvidia to integrate Cisco’s ethernet technology with Nvidia’s AI solutions further illustrates its commitment to staying at the forefront of technological innovation.