Cisco Systems is reportedly planning a second wave of job cuts this year, potentially affecting thousands of employees, as the company shifts its focus to higher-growth areas like cybersecurity and artificial intelligence. This follows the layoff of approximately 4,000 employees in February.
Sources indicate that the number of layoffs could match or exceed the previous round, with an announcement expected to coincide with Cisco’s fourth-quarter results on Wednesday.
Cisco, which employed around 84,900 people as of July 2023, has been grappling with reduced demand and supply-chain challenges in its core business of routers and switches. In response, the company has sought to diversify, completing a $28 billion acquisition of cybersecurity firm Splunk in March to strengthen its subscription services.
Cisco recently launched a $1 billion global investment fund to accelerate the development of secure and reliable AI solutions. As part of this initiative, it has made strategic investments in startups like Cohere, Mistral AI, and Scale AI, reinforcing its strategy to connect and protect the AI era.
Last week, tech giant Dell announced the elimination of approximately 12,500 jobs, marking the second round of layoffs in under 15 months as the company accelerates its shift toward AI. The internal memo revealed plans to centralise sales teams and establish a dedicated unit for AI products and services, raising concerns about job security in the tech sector.
Earlier this month, Intel CEO Pat Gelsinger also issued a memo on August 1, 2024, outlining a cost-cutting initiative following the company’s second-quarter 2024 earnings release. These layoffs reflect a broader trend in the tech industry, where significant workforce reductions are being made to support large investments in AI.
These layoffs underscore a broader trend in the tech industry, where companies are cutting costs to manage large-scale investments in AI.