Cisco plans second round of thousands of job cuts after laying off more than 4,000 staff in February amidst sluggish growth, report says
Cisco is to lay off thousands more staff in second round of cuts this year, following the elimination of more than 4,000 jobs in February, Reuters reported.
The cuts are part of a move to offset sluggish growth in the company’s mainstay business of networking equipment, the report said, citing people familiar with the matter.
Cisco has said it is looking to shift away from one-of sales of switches and routers into areas such as cybersecurity and artificial intelligence (AI) that provide higher growth and subscription revenues.
The company could announce the cuts as early as Wednesday when it announces its fourth-quarter fiscal results, the report said.
Shift to AI
Cisco stock fell slightly under 1 percent on Friday and is down more than 9 percent this year.
The company in September of last year purchased cybersecurity firm Splunk for $28 billion (£22bn) as part of its diversification drive, with the acquisition closing in March.
Cisco has said it is aiming for $1bn in AI product orders next year and has invested in start-ups such as Cohere, Mistral and Scale AI.
In February Cisco said it would cut 5 percent of its workforce, or roughly 4,250 jobs out of approximately 84,900 staff worldwide.
The company said at the time it would recognise pre-tax charges of approximately $800m consisting of severance and other one-time termination benefits and other costs.
“We continue to align our investments to future growth opportunities,” Cisco chair and chief executive Chuck Robbins told analysts at the time.
Industry cuts
“Our innovation sits at the centre of an increasingly connected ecosystem and will play a critical role as our customers adopt AI and secure their organisations.
“We also continue to see weak demand with our telco and cable service provider customers.”
Tech giants including Dell, Google, Amazon, eBay, Microsoft, Salesforce and TikTok have announced fresh rounds of layoffs this year after axing thousands of jobs in 2022 and 2023.
Intel said earlier this month it would cut its staff by 15 percent as it announced weak financial results.
More than 126,000 people have been laid off at 393 tech companies since the beginning of the year, according to Layoffs.fyi.
