Just when employees were frustrated over the uncertainty and the impact of two significant layoffs within the same calendar year, Cisco seems to be implementing another round of job cuts. The US tech major, which has been facing decreasing demand and has felt the need to cut costs, is now focusing on investing in artificial intelligence (AI). Meanwhile, restructuring costs are reportedly expected to touch $1 billion before taxes.
The workforce of Cisco was about 84,900 strong as of July 2023, till the two rounds of job cuts this year reportedly took away thousands of jobs.
Following the August layoffs, some employees had voiced their dissatisfaction, criticising the company’s focus on layoffs rather than innovation and revenue growth. At the time, Cisco’s filing with the SEC had confirmed that it would reduce its workforce by seven per cent. Cisco had earlier cut about 4,000 jobs in February 2024.
The company had been facing reduced demand along with supply- chain issues in its core business of routers and switches. In response, the company had diversified, including a $28 billion acquisition of cybersecurity firm Splunk, in March, to boost its subscription services.
Despite the falling demand and other challenges, Chuck Robbins had said the firm would finish the 2024 fiscal in a strong way. Robbins himself had received $31.8 million in executive compensation for 2023.
Cisco had maintained that the layoffs in August were not driven by a need to boost profitability. Instead, they were part of a broader strategic realignment aimed at strengthening Cisco’s focus on cybersecurity, cloud systems and artificial intelligence (AI) products. No wonder it is reported that the company is focusing on high-growth areas and has allocated $1 billion to AI startups.
