Cisco is cutting thousands of more jobs as it shifts focus to growing business segments like cybersecurity and AI
In a second round of layoffs, Cisco is cutting thousands of jobs as it shifts focus to growing business segments like cybersecurity and AI. Early reports indicate the number of affected employees will be similar to the 4,000 cut in February, if not slightly higher. When Reuters first reported the second round of cuts, Cisco’s shares fell nearly 1% and its stock was down more than 9% as of Thursday’s close.
Disappointing market demand and supply-chain constraints in Cisco’s main business — routers and switches — is being blamed for the cuts and for the heightened focus on incorporating AI into its offerings. In June, Cisco held its annual Cisco Live event, where CEO Chuck Robbins detailed the company’s expanding artificial intelligence strategy, sharing that AI is finding its place across its collaboration, networking, observability and security solutions.
Examples include, AI updates to Cisco ThousandEyes for digital experience assurance across on-prem datacenters, public cloud(s) and everywhere in between, as well as a $1 billion AI investment fund meant to embolden Cisco’s AI strategy. In July, Cisco’s EVP & GM of Security and Collaboration Jeetu Patel told RCR Wireless that Cisco believes AI will part of the “fabric of virtually everything” and “deployed across almost every piece of technology.”
What’s going on at Cisco isn’t really a surprise — headlines featuring job cuts in the telecom and tech industries have become routine as these companies are looking to cut costs to offset their big AI investments. Dell, for instance, laid off thousands of employees on its sales team earlier this month. In a leaked memo, executives said the company is “getting leaner” to better capitalize on its AI play.
Cisco will announce its Q4 2024 financial results later this week.