Layoffs to impact 6,000 employees as Cisco shifts resources towards cybersecurity and artificial intelligence advancements
Cisco Systems is set to reduce its global workforce by approximately 7 per cent, affecting around 6,000 employees, as the company intensifies its focus on high-growth sectors such as cybersecurity and artificial intelligence (AI). This marks the second major round of job cuts by Cisco this year, following the removal of 4,000 positions in February.
The decision to streamline personnel comes as part of a broader reorganisation strategy aimed at boosting efficiency and investing in critical growth areas. Despite reporting a 10 per cent decline in quarterly revenue to USD 13.64 billion, Cisco managed to surpass market expectations of USD 13.54 billion.
The upcoming layoffs, projected to incur pre-tax costs of up to USD 1 billion, align with Cisco’s strategic shift towards emerging technologies. Around USD 700-800 million of these costs will be accounted for in the first quarter of fiscal 2025. The move is seen as part of Cisco’s effort to capitalise on the growing demand for AI and cybersecurity solutions.
Cisco’s CEO, Chuck Robbins, remained optimistic about the company’s trajectory, stating, “Inventory digestion is complete, and we’re now returning to a more normalised demand environment,” during a conference call with analysts.
In June, Cisco allocated USD 1 billion towards investments in AI start-ups and recently finalised a USD 28 billion acquisition of the cybersecurity firm Splunk. Additionally, the company is restructuring its operations by integrating its networking, security, and collaboration units into a unified organisation, a move expected to enhance efficiencies and channel resources towards key growth sectors.
For the upcoming quarter, Cisco projects revenue in the range of USD 13.65 billion to USD 13.85 billion, exceeding analyst expectations.