The number of employees impacted may be comparable to or
slightly exceed the 4,000 individuals laid off in February, with an
announcement expected as early as Wednesday alongside the company’s
fourth-quarter financial results. These sources, who requested anonymity, were
not authorized to disclose this information publicly.
Reuters had previously reported on the job cuts that Cisco,
based in San Jose, California, announced in February before the official
announcement was made.
As of July 2023, the company employed approximately 84,900
individuals, a figure that does not include the February layoffs. Cisco has not
yet responded to requests for comment. Following the initial report by Reuters,
the company's shares declined by nearly 1%, and the stock has fallen over 9%
this year as of Thursday's market close.
As the leading manufacturer of routers and switches that
manage internet traffic, Cisco has been facing challenges due to weak demand
and supply chain issues within its core business.
This has prompted the company to diversify its operations,
exemplified by its $28 billion acquisition of cybersecurity firm Splunk,
completed in March. This acquisition aims to lessen its dependence on one-time
equipment sales by enhancing its subscription-based revenue model.
Cisco has also been actively integrating AI products into
its portfolio and reaffirmed its goal of achieving $1 billion in AI product
orders by 2025. In June, the company established a $1 billion fund to invest in
AI startups, including Cohere, Mistral AI, and Scale AI, and noted that it had
made 20 acquisitions and investments focused on AI in recent years.
The layoffs at Cisco are part of a broader trend in the
technology sector, which has seen significant cost-cutting measures this year
in response to substantial investments in AI. According to data from the
tracking website Layoffs.fyi, over 126,000 employees have been laid off across
393 tech companies since the beginning of the year.
Earlier in August, chipmaker Intel cut over 15% of its workforce, or some 17,500 people, as it tried to turn around its money-losing manufacturing business.
Cisco, (Commercial and Industrial Security Corporation) a global leader in information technology and networking solutions, specializes in providing comprehensive networking assistance to businesses of all sizes. Its expertise lies in facilitating seamless connectivity, interaction, and collaboration within organizations, enabling them to thrive in the digital age.