Cisco Systems is set to implement significant job cuts as part of its ongoing restructuring efforts, which include reductions in its cybersecurity and artificial intelligence divisions. Sources indicate that the number of employees affected by this latest round of layoffs could match or exceed the 4,000 employees let go in February. This move aligns with Cisco’s strategic shift toward higher-growth areas in response to sluggish demand and ongoing supply chain challenges. The formal announcement of the layoffs is expected to coincide with the company’s fourth-quarter financial results, which are anticipated soon.
These layoffs are part of a broader trend within the tech industry, which has seen over 126,000 employees laid off from 393 companies since the beginning of the year. Companies are increasingly cutting costs to mitigate the financial strain from large investments in AI and other emerging technologies. For instance, Intel recently reduced its workforce by over 15%, amounting to approximately 17,500 employees, in an attempt to stabilize its financially struggling manufacturing sector.
Cisco, a leader in networking equipment and internet traffic management, is grappling with declining demand for its core products. The company has responded by diversifying its business model, including a notable $28 billion acquisition of cybersecurity firm Splunk, which was completed in March. This acquisition aims to enhance Cisco’s subscription services and lessen its dependency on one-time hardware sales, which have been adversely affected by current market conditions.
In addition to its strategic acquisitions, Cisco is focusing on integrating AI into its offerings. The company has set a goal of achieving $1 billion in AI product orders by 2025 and has initiated a $1 billion fund for investments in AI startups. With a history of 20 AI-related acquisitions and investments over the last several years, Cisco is positioning itself to remain competitive in a rapidly evolving technological landscape, even as it navigates the challenges of workforce reduction and market demands.
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