Cisco is reportedly preparing for a second round of layoffs this year, potentially affecting thousands of employees as the company shifts its focus towards higher-growth areas like cybersecurity and artificial intelligence (AI).
Sources familiar with the matter suggest that the number of affected employees could be similar to or even exceed the 4,000 laid off in February. The announcement is expected to coincide with the company’s fourth-quarter results, likely on Wednesday, as reported by Reuters.
This move follows Cisco’s efforts to diversify its business in response to sluggish demand and supply chain issues affecting its core networking equipment operations. The company, which had approximately 84,900 employees as of July 2023, has been pivoting away from its reliance on hardware sales by expanding into subscription-based services. A key part of this strategy was its $28 billion acquisition of cybersecurity firm Splunk in March, aimed at bolstering its cybersecurity offerings.
Cisco has also been increasing its investments in AI, setting a goal of reaching $1 billion in AI product orders by 2025. In June, the company launched a $1 billion fund to invest in AI startups like Cohere, Mistral AI, and Scale AI, and has made 20 AI-focused acquisitions and investments in recent years.
