Why it matters: US tech giant Cisco is planning to cut thousands of workers in what will be its second round of layoffs this year. Reports state that slowing demand and shifting focus to growth areas, including AI, means 4,000 or more workers at the company could soon be out of a job.
It was only in February when Cisco laid off 4,000 people, or 5% of its workforce, as it struggled with a challenging economy and weak demand.
According to Reuters, Cisco is preparing to announce a new round of job cuts, possibly alongside its fourth-quarter results on Wednesday. The publication writes that the number of people being let go is likely to match or be higher than the 4,000 employees laid off in February. The company had nearly 85,000 workers at the end of fiscal 2023; this count does not include the effects of the previous round of layoffs.
Cisco spent $28 billion completing the acquisition of cybersecurity specialist Splunk in March, a purchase that Cisco hopes will reduce its reliance on one-time equipment sales by boosting its subscription offerings.
As with so many recent layoffs in the tech world, AI has once again played a part in people losing their jobs. Cisco launched a $1 billion fund to make investments in AI startups in June, and it has made 20 AI-focused acquisitions and investments in the last several years. Cost cutting helps offset these big investments, and fears that returns on AI spending won’t match the money being poured into the industry isn’t helping matters.
The company is also focusing on an AI partnership with Nvidia that will see Cisco and Team Green’s purpose-built Ethernet networking-based solutions sold through the former’s global channels.
Cisco’s layoffs are just the latest in what has been another terrible year (so far) for the tech industry. Last week brought news that Dell is cutting thousands of jobs as part of AI-focused restructuring. Intel, meanwhile, is having its worst time in years, and is planning on cutting 15,000 jobs.
According to tracking website Layoffs.fyi, 397 tech companies have laid off 130,482 employees so far in 2024. Throughout all of 2023, 1,193 firms in the industry laid off 264,220 workers.