Cisco is set to cut thousands more jobs this year as it shifts its focus to higher-growth areas and adjusts to current economic conditions.
The exact number of jobs to be slashed has not been confirmed, but sources close to the matter told Reuters they expect the figure to be similar or slightly higher than the 4,000 staff it laid off earlier this year.
The previous round of layoffs was announced in February, and saw Cisco unveil plans to reduce its global workforce by 5%.
This latest round of cuts is expected to be formally announced on Wednesday 14 August alongside Cisco’s fourth quarter financial results.
As of July 2023, Cisco boasted a workforce comprising 84,900 staff, not accounting for the approximately 4,000 jobs it cut in February 2024.
Cisco’s shares fell by nearly 1% after the first round of layoffs were reported, and at the time of writing the firm’s stock is down approximately 15% on the previous year.
The company has seen slowing demand for its traditional business segments, with insiders telling Reuters the layoffs were aimed at restructuring the business around areas with higher growth potential.
Two areas the company is said to have identified as core drivers of the business moving are cybersecurity and AI, reflected in the firm’s recent major acquisition of Splunk in March 2024.
ITPro approached Cisco for comment on this development, but it did not immediately receive a response.
Cisco is the latest to cut jobs and focus on AI
Cisco’s layoffs come amid a flurry of similar announcements from large tech firms, signaling the sector is adjusting to shifting economic conditions and an evolving workforce.
Both Dell Technologies and Intel also recently confirmed they would be cutting 15% of their headcount by the end of 2024, with Dell stating it was reorganizing its go-to-market teams to become “leaner” as it transitions its focus to AI.
Salesforce laid off thousands of employees in January 2023, stating it planned to begin rehiring for tech roles in September, but this approach was reportedly paused as of January 2024.
German software giant SAP also announced restructuring plans would affect approximately 8,000 job roles in January 2024, once again targeting integrating generative AI tools into its operations.
The company was quick to clarify this would not constitute mass job cuts, stating the majority of the affected positions were “expected to be covered by voluntary leave programs”.
Experts told ITPro in February that the driving force behind these large-scale restructuring efforts was associated with a transformation of tech industry requirements.
Characterized as a “readjustment”, Bola Rotibi, chief of enterprise at CCS Insight explained that while jobs are being cut, new roles are constantly emerging in growth areas like AI, cybersecurity, and cloud infrastructure.
As such, she described the general trend as closer to rebalancing the business, moving staff from stagnant segments to high growth areas, stating that while some staff may be let off in one area of the business, this number could be absorbed by a hiring push six months later.
-
-
-
-
-
-
-
-
