Next week, Cisco will announce a new round of staff cuts during its quarterly report, which will lay off approximately the same number of employees as in the first wave of cuts in February of this year – about 4,000 people, Reuters reports, citing informed sources.
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According to Cisco reporting, as of July 2023, the company employed about 84,900 people. After the Reuters report, Cisco shares fell 1%, and since the beginning of the year they have fallen 9%.
As the largest manufacturer of networking equipment, Cisco has faced weak demand for its products and supply chain constraints. In this regard, the company began diversifying its business by purchasing Splunk, a company specializing in cybersecurity and big data analysis, for $28 billion. The deal will allow Cisco to reduce its dependence on hardware sales by promoting a subscription business model. According to sources, the new layoffs are due to the fact that the company is shifting its attention to areas with higher growth rates, such as cybersecurity and AI technologies.
The company is committed to incorporating AI solutions into its offerings, announcing in May a goal of securing $1 billion in orders for AI products by 2025. In June, Cisco launched a $1 billion fund to invest in AI startups such as Cohere, Mistral AI and Scale AI. Cisco also said at the time that it had acquired 20 AI companies over the past few years.