he tech company Cisco will implement a second round of layoffs this year because the company wants to shift its focus to higher-growth areas like cybersecurity, and artificial intelligence.
It’s expected that the number of affected employees will be similar to or higher than the previous laid-off in February when Cisco cut off more than 4,000 jobs. The Cisco tech layoffs will probably be announced this Wednesday along with the company’s fourth-quarter results.
Last year, the company employed more than 84,900 people but this number doesn’t account for the job cuts that happened back in February.
Cisco is the biggest maker of routers and switches that direct internet traffic. Lately, they have been struggling with slow demand and some challenges in the supply chain of its core business.
These pressures have pushed the technology company to diversify its portfolio with a big move such as a $28 billion acquisition of the cybersecurity firm Splunk back in March this year. The acquisition is expected to reduce the reliance on one-time equipment sales by boosting the subscription business.
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Recently, Cisco tried to incorporate some products based on Artificial Intelligence in its offerings, and in May this year, they reiterated the target of $1 billion worth of AI products and services orders for 2025. Back in June, Cisco launched a $1 billion fund for investments in Artificial Intelligence startups such as Cohere, Mistral AI, and Scale AI to solidify its commitment to AI. Their focus on cybersecurity and AI plays a role in a broader strategy to shift into the technological landscape.
This time of the year, the layoffs are coming in a trend that all the companies in the tech industry are reducing the costs to balance the major investments in AI.
According to the tracking website, Layoffs.fyi, more than 126,000 people were laid off from their jobs in 393 tech companies this year. The Cisco decision to cut off some jobs lines up with the tech industry trend of wide-cutting measures.
Following these trends, Intel also announced earlier this month some significant layoffs of 15% of the workforce, about 17,500 employees, and struggled to turn around its manufacturing business.
As far as Cisco is concerned, we expect to see this Wednesday an announcement about these layoffs in the fourth quarter results of this year.
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