Cisco cuts thousands of jobs in second round of layoffs amid shift to AI: report

Cisco will cut thousands of jobs in a second round of layoffs this year as the networking equipment maker shifts focus to higher-growth areas, including cybersecurity and AI, people familiar with the matter said.

The number of people affected could be similar to or slightly higher than the 4,000 Cisco employees laid off in February, and is likely to be announced as early as Wednesday with the company’s fourth-quarter results, the sources said. who were not authorized to speak publicly. .

Reuters exclusively reported the job cuts that San Jose, California-based Cisco announced in February, before the company announced it.

The company employed about 84,900 people as of July 2023, according to its annual filing. This number does not count layoffs in February.

Cisco did not immediately respond to a Reuters request for comment.

Cisco, the largest maker of routers and switches that direct Internet traffic, has been grappling with sluggish demand and supply chain constraints in its core business.

That has prompted the company to diversify with moves such as the $28 billion acquisition of cybersecurity firm Splunk, which it completed in March. The acquisition will reduce its reliance on one-time device sales while growing its subscription business.

The company has been trying to incorporate AI products into its offerings, and in May reiterated its goal of $1 billion in AI product orders by 2025. In June, it launched a $1 billion fund to make investments in startups of AI such as Cohere, Mistral AI and Scale AI.

The company said at the time that it had made 20 AI-focused acquisitions and investments over the past several years.

The layoffs are the latest in the tech industry, which has cut costs this year to offset heavy investments in AI.

More than 126,000 people have been laid off at 393 tech companies since the start of the year, according to data from the tracking site Layoffs.fyi.

Earlier in August, chipmaker Intel cut more than 15% of its workforce, or about 17,500 people, as it tried to turn around its money-losing manufacturing business.