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Cisco Systems to Implement Additional Job Cuts Amid Strategic Shift
According to reports from Reuters, Cisco Systems Inc. is set to reduce its workforce further, announcing additional layoffs in a second wave this year. This move comes as the networking equipment giant pivots towards more rapidly expanding sectors such as cybersecurity and artificial intelligence.
In February, Cisco had already initiated the elimination of around 4,000 jobs following a significant slowdown in corporate technology spending, which hindered its sales growth. By the conclusion of fiscal 2023, which ended in July, Cisco employed nearly 85,000 individuals.
The decision to cut jobs aligns with trends observed across the technology sector, where several companies are downsizing to adapt to fluctuating demand. While the surge in AI investments has bolstered growth for some tech firms, traditional IT entities have not experienced similar benefits. Recently, Intel Corp. disclosed plans to reduce its workforce by 15,000 employees in response to disappointing sales, while Dell Technologies Inc. is also streamlining its sales divisions through job reductions.
On Wall Street, Cisco’s stock saw a decline, dipping as much as 1.3% to reach $45.24 in New York. Entering Friday’s session, shares had already decreased by 9.3% for the year.
The upcoming layoff announcements may coincide with the company’s quarterly earnings report, anticipated as early as Wednesday. Earlier this year, a positive outlook from Cisco had raised expectations that investment in IT might be on the rise again. However, the tech industry is currently grappling with renewed apprehensions about the economy and the uncertainty surrounding the immediate benefits of investments in AI.
While Cisco did not provide specific comments regarding the impending layoffs, Chief Executive Officer Chuck Robbins has been advocating for a longer-term transformation of the company. This strategy aims to position Cisco as a provider of networking software and services, rather than solely relying on the traditional model of hardware sales. The company is also focused on leveraging the ongoing AI surge, which has significantly benefitted competitors like Nvidia Corp.
Source
finance.yahoo.com