Cisco Systems is reducing its workforce by 7% in a strategic shift towards AI and cybersecurity, marking its second round of job cuts this year. With a staff of around 84,900 as of July 2023, the company plans to eliminate about 5,900 positions.
This decision follows an earlier layoff of approximately 4,000 employees announced in February. The company is redirecting its resources to rapidly growing technology sectors, including a $1 billion investment in startups like Cohere, Mistral, and Scale, and a new partnership with Nvidia to develop AI infrastructure. Despite these cuts, Cisco’s stock rose by 6% after-hours, contrasting with Intel’s recent announcement of 15,000 job cuts, which led to a significant drop in its stock price.
Cisco’s restructuring aims to mitigate the impact of declining earnings, with the company reporting a 45% drop in fiscal fourth-quarter profits compared to the previous year. Revenue also fell by 10%, but Cisco forecasts a slight rebound in the current quarter, with expected adjusted earnings of 86 to 88 cents per share. Analysts note that Cisco’s job cuts and strategic investments are designed to counterbalance recent financial challenges and support growth in AI and cybersecurity sectors. The restructuring is expected to help the company recover from its recent earnings downturn and optimize its workforce following the acquisition of cybersecurity firm Splunk.
Reference:
- https://apnews.com/article/cisco-job-cuts-technology-layoffs-78ad036870555f53fe03739cf1ae76f9
