Cisco, the global networking giant, is reportedly planning to lay off thousands of employees as it shifts its focus toward expanding its cybersecurity division and meeting the rising demand for AI technologies.
According to sources cited by Reuters, this second round of layoffs may be as large, or even larger, than the previous round in February when around 4,000 employees were let go. As of July 2023, Cisco had a workforce of 84,900. An official announcement could come as early as Wednesday, coinciding with the release of the company’s fourth-quarter results.
The layoffs come as Cisco faces another tough quarter. The company previously forecasted Q4 revenues between $13.4 billion and $13.6 billion, reflecting an 11% year-over-year decline. Additionally, Cisco’s net income in Q3 fell by 41%, from $3.2 billion to $1.9 billion.
In response to these challenges, Cisco has been diversifying its offerings. A significant move was the acquisition of data analytics firm Splunk for $28 billion, a deal that added 7,000 employees to Cisco’s roster. The company has also been positioning itself as a leader in AI networking, competing with Nvidia’s InfiniBand by promoting Ethernet as a viable alternative for large-scale AI deployments.
Cisco is actively participating in the Ultra Ethernet Consortium, which aims to create Ethernet-based technology optimized for high-performance computing and AI. The company has set a goal of reaching $1 billion in AI product orders by the end of its 2025 fiscal year.
Cisco’s layoffs are part of a broader trend in the tech industry, with other companies like Intel and Dell also announcing significant workforce reductions recently as they navigate financial pressures and evolving market demands.
