Cisco plans thousands more layoffs in second cut this year
Cisco Systems, the renowned US-based networking equipment manufacturer, is preparing for a significant workforce reduction, according to Reuters. This move marks the second major round of layoffs this year. The company plans to terminate thousands of jobs as it pivots toward high-growth sectors like artificial intelligence (AI) and cybersecurity. The exact number of affected employees could be on par with or slightly exceed the 4,000 workers, laid off earlier in February.
Workforce and business challenges
As of July 2023, Cisco's workforce consisted of approximately 84,900 employees. This figure does not include the impact of the February layoffs. The company has been facing challenges due to slow demand and supply chain issues in its core business. To mitigate these issues, Cisco is diversifying its operations with a focus on higher-growth areas like AI and cybersecurity.
Cisco's strategic acquisitions and AI focus
In March, Cisco completed a $28 billion acquisition of cybersecurity firm Splunk. This strategic move aimed to reduce dependence on one-time equipment sales and enhance its subscription business. The company has also been integrating AI products into its services, with a goal of achieving $1 billion in AI product orders by 2025. To further this objective, Cisco launched a $1 billion fund in June to invest in promising AI start-ups such as Cohere, Mistral AI, and Scale AI.
Take a look at tech industry layoffs
The layoffs at Cisco reflect a broader trend in the tech industry, which has been reducing costs to balance substantial investments in AI. According to Layoffs.fyi, over 126,000 people have been laid off across 393 tech firms since the start of this year. In early August, chipmaker Intel reduced its workforce by over 15%, laying off thousands of employees in an effort to revive its struggling manufacturing business.
Cisco's future plans in Taiwan
Despite the layoffs, Cisco continues to expand its global footprint. In June, the company announced plans to establish a cybersecurity center in Taiwan and collaborate with the government to train more individuals for this sector. As part of its Taiwan Digital Acceleration Plan 3.0, Cisco aims to work with relevant tech associations to set up a security center for improved threat intelligence and cyber readiness.
