Cisco is preparing for another wave of significant layoffs, which could match or exceed the 4,000 positions cut earlier this year. The announcement is anticipated around the time of Cisco’s fourth-quarter financial results, expected on Wednesday. This move aligns with Cisco’s strategic pivot towards high-growth sectors like cybersecurity and artificial intelligence (AI), amidst ongoing challenges in its traditional networking equipment business.
Key Points:
- Layoffs Scope: The upcoming job cuts are expected to impact a similar or slightly higher number of employees compared to the 4,000 layoffs in February.
- Financial Results: The announcement is expected to coincide with Cisco’s fourth-quarter financial results.
- Employee Count: As of July 2023, Cisco had approximately 84,900 employees, not accounting for the February layoffs.
- Market Impact: Cisco’s shares have fallen nearly 1% following earlier reports on the job cuts, and the stock has declined over 9% this year.
- Strategic Shift: Cisco is focusing on expanding its presence in cybersecurity and AI. This includes its $28-billion acquisition of cybersecurity firm Splunk and a $1-billion fund to invest in AI startups.
- Broader Industry Trend: The layoffs reflect a larger trend in the tech industry, with over 126,000 employees laid off across 393 tech companies this year.
This strategic shift aims to address slowing demand and supply chain issues in Cisco’s core networking equipment business while positioning the company for future growth through diversification and innovation.
