Why it matters: US tech giant Cisco is planning to cut thousands of workers in what will be its second round of layoffs this year. Reports state that slowing demand and shifting focus to growth areas, including AI, means 4,000 or more workers at the company could soon be out of a job.
Cisco is preparing to announce a new round of job cuts, possibly alongside its fourth-quarter results on Wednesday. The company had nearly 85,000 workers at the end of fiscal 2023; this count does not include the effects of the previous round of layoffs.
The company is focusing on an AI partnership with Nvidia and has made 20 AI-focused acquisitions and investments in the last several years. Cost cutting helps offset these big investments, and fears that returns on AI spending won’t match the money being poured into the industry isn’t helping matters.
Cisco’s layoffs are just the latest in what has been another terrible year for the tech industry. The company spent $28 billion completing the acquisition of cybersecurity specialist Splunk in March, a purchase that Cisco hopes will reduce its reliance on one-time equipment sales by boosting its subscription offerings.