Cisco To Lay Off 5% Of Its Global Workforce; That's More Than 4,000 Workers
Date
2/14/2024 11:00:19 PM
(MENAFN- AsiaNet News) technology giant Cisco has revealed its intention to lay off 5 per cent of its worldwide workforce to realign its focus towards key priority areas such as artificial intelligence (AI). This decision, announced on Wednesday, adds Cisco to the growing list of tech companies undergoing significant workforce reductions in recent times.
Cisco's CEO Chuck Robbins emphasized the company's commitment to investing in future growth opportunities, stating, "Our innovation sits at the center of an increasingly connected ecosystem and will play a critical role as our customers adopt AI and secure their organizations." With a global workforce of nearly 85,000, the layoffs are expected to affect thousands of employees.
The restructuring, aimed at optimizing resources and enhancing competitiveness, is anticipated to commence this year and extend into the following year. Cisco estimates the cost of severance and termination benefits for affected employees to be close to $800 million.
Facing declining revenue, Cisco has redirected its efforts towards the burgeoning AI industry. Last year, the company announced its acquisition of machine learning and cybersecurity firm Splunk in a deal valued at $28 billion, positioning itself as a leader in security and observability within the AI landscape.
However, Cisco's financial performance in the fiscal second quarter revealed a 6% decline in revenue year-over-year, with earnings-per-share also dropping by 3% over the same period. These figures underscore the challenges the company faces amid shifting market dynamics and intensified competition.
The tech industry at large has witnessed a wave of layoffs despite substantial investments in AI. Major players like Google, Amazon, PayPal, and Duolingo have all announced workforce reductions in recent times. According to data compiled by Layoffs, over 34,000 tech employees have been laid off since the beginning of 2024, indicating a broader trend within the sector.
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