Cisco Systems, Inc. (NASDAQ:CSCO) is set to lay off thousands of employees in its second major job cut this year, as the U.S.-based networking equipment giant refocuses on high-growth sectors such as cybersecurity and artificial intelligence (AI). The upcoming layoffs may mirror or exceed the 4,000 positions cut in February, with an official announcement expected as early as Wednesday, coinciding with the company’s fourth-quarter financial results.
Impact on Workforce and Strategic Adjustments
As of July 2023, Cisco employed approximately 84,900 individuals, excluding those affected by the February layoffs. The company, headquartered in San Jose, California, has faced challenges including sluggish demand and supply-chain issues within its core internet traffic management equipment business. Cisco has been diversifying its operations to counteract these issues, notably through its $28 billion acquisition of cybersecurity firm Splunk, completed in March. This strategic move aims to reduce dependency on one-time equipment sales by enhancing its subscription-based revenue stream.
Additionally, Cisco has been expanding its AI capabilities, aiming to secure $1 billion in AI product orders by 2025. The company recently launched a $1 billion fund to invest in AI startups such as Cohere, Mistral AI, and Scale AI, and has made 20 AI-related acquisitions and investments over recent years.
Broader Industry Trends
The latest round of Cisco layoffs aligns with broader trends in the tech industry, where numerous companies are implementing cost-cutting measures to balance substantial investments in AI. According to Layoffs.fyi, over 126,000 employees across 393 tech firms have been laid off since the beginning of the year. Notably, Intel Corporation (NASDAQ:INTC) also reduced its workforce by more than 15%, amounting to approximately 17,500 positions, to address challenges within its manufacturing sector.
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Author Faith Yakubu 
