(Times Of Update) — Cisco Systems Inc. plans to cut thousands more jobs in a second round of layoffs this year, Reuters reported, as the networking equipment maker focuses on faster-growing businesses such as cybersecurity and artificial intelligence.
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The news follows Cisco’s decision to cut about 4,000 jobs in February after a slowdown in the company’s technology spending wiped out its sales growth. The company had nearly 85,000 employees at the end of its 2023 fiscal year, which ended in July of that year.
Cisco is joining other tech companies that are cutting staff to cope with uneven demand. While spending on artificial intelligence has helped fuel growth in some areas, traditional information technology giants haven’t benefited as much. Intel Corp. said last week it plans to cut 15,000 jobs to cope with sluggish sales. Dell Technologies Inc. is also cutting positions as it reorganizes its sales teams.
Cisco shares fell 1.3 percent to $45.24 in New York trading. They were down 9.3 percent year-to-date before Friday’s session.
The latest job cuts could be announced as early as Wednesday, when the company reports fourth-quarter results, according to Reuters. Three months ago, Cisco’s upbeat forecast raised hopes that IT customers had started spending again. But the tech sector as a whole has been roiled by more recent concerns about the economy — and the idea that spending on AI might not pay off in the short term.
A Cisco representative declined to comment on the layoff plans.
Longer term, CEO Chuck Robbins has tried to transform Cisco into a provider of networking services and software, rather than a company focused on one-off hardware sales. The company is also looking to capitalize more on the rise of artificial intelligence that has boosted sales at companies like Nvidia Corp.
–With assistance from Brody Ford.
(Updated with previous layoffs in third paragraph.)
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