Report: Cisco's second round of layoffs is coming, with an announcement of cutting thousands of employees as early as next Wednesday
According to media reports, Cisco will conduct a second round of layoffs this year, with the number of layoffs reaching thousands. The announcement is expected to be made as early as next Wednesday, aiming to concentrate company resources on high-growth areas such as cybersecurity and artificial intelligence. The technology industry has been cutting costs this year to optimize resource allocation and focus on areas such as artificial intelligence
On Friday, August 9th, Eastern Time, media reports cited sources familiar with the matter as saying that American networking equipment giant Cisco plans to conduct a second round of layoffs this year, with the number of layoffs expected to be similar to or slightly more than the 4,000 employees laid off in February. The layoff plan is expected to be announced next Wednesday when the fourth-quarter financial report is released, aiming to redirect the company's resources and attention to high-growth areas such as cybersecurity and artificial intelligence.
According to Cisco's annual report, as of July 2023, the company had approximately 84,900 employees, a number that does not include the layoffs in February this year.
As a leader in the field of internet routers and switches, Cisco faces the dual challenges of weak demand in its core business and supply chain constraints, prompting the company to adopt a diversification strategy. For example, in March this year, Cisco completed the $2.8 billion acquisition of the cybersecurity company Splunk. This acquisition is expected to optimize the company's revenue structure by promoting its subscription business and reducing reliance on one-time device sales models.
In addition, Cisco is committed to integrating artificial intelligence products into its product line and reiterated its goal in May this year to achieve $1 billion in artificial intelligence product orders by 2025. In June, the company launched a $1 billion fund to invest in artificial intelligence startups such as Cohere, Mistral AI, and Scale AI. Cisco stated that it has completed 20 acquisitions and investments centered around artificial intelligence in recent years.
This is the latest round of layoffs in the tech industry, which has been cutting costs this year to offset the massive investments in artificial intelligence. Several tech companies, including Intel, have announced layoffs. Intel announced in early August that it would lay off over 15%, about 17,500 people, in an effort to restore profitability to its manufacturing business by reducing costs.
According to data from the tracking website Layoffs.fyi, since the beginning of this year, over 126,000 people have been laid off by 393 tech companies.
Overnight on Friday, Cisco's stock price rose nearly 0.5% before falling over 1.2% at one point. As of Thursday's close, Cisco's stock price has fallen by nearly 9.3% year-to-date.
