Cisco Systems to lay off thousands of its employees

Cisco Systems is reportedly preparing for a significant round of layoffs, which could see thousands of employees losing their jobs. This would mark the second major round of job cuts by the company this year. The has announced plans to lay off around 6,000 employees, which represents about 7% of its global workforce.

Cisco is restructuring its operations, shifting its focus towards faster-growing sectors such as cybersecurity and artificial intelligence. These strategic moves are part of Cisco's broader effort to adapt to the evolving technology landscape, where demand for traditional networking equipment is declining, and newer, more dynamic areas like AI and cybersecurity are gaining prominence.

The layoffs are a reflection of the broader trend within the tech industry, where companies are realigning their resources to stay competitive in rapidly changing markets. Earlier this year, in February, Cisco Systems implemented significant job cuts, laying off approximately 4,000 employees.

Now, the company is reportedly preparing for another round of layoffs, with a similar or potentially higher number of employees affected. The announcement of these layoffs is expected to coincide with Cisco's fourth-quarter financial results, possibly as early as Wednesday.

As of July 2023, Cisco had around 84,900 employees, according to its annual filing. These layoffs are part of Cisco's broader strategy to realign its workforce and resources towards high-growth areas like cybersecurity and artificial intelligence, as the company navigates the shifting demands in the tech industry.

Cisco Systems is indeed making a significant shift in its strategic focus towards artificial intelligence (AI). In May, the company reiterated its ambitious goal of achieving $1 billion in AI product orders by 2025. To support this vision, Cisco launched a $1 billion fund in June to invest in AI startups, including companies like Cohere, Mistral AI, and Scale AI.

Over the past few years, Cisco has also been actively acquiring and investing in AI-focused companies, with 20 such transactions completed. These moves underline Cisco's commitment to becoming a major player in the AI space.

However, these investments in AI are coming at a time when the broader tech industry is facing cost pressures, leading to widespread layoffs. Cisco's recent and upcoming job cuts are part of this trend, as the company seeks to realign its workforce to better support its AI initiatives and manage costs in a challenging economic environment.