Cisco to Lay Off 5,000 Employees, Second Round of Layoffs in 2024Â to Focus on AI Innovation
Cisco to Lay Off 5,000 Employees, Second Round of Layoffs in 2024Â to Focus on AI Innovation
Cisco has announced its second wave of layoffs this year, with plans to downsize its global workforce by 7%, which is expected to affect around 5,000 employees. Earlier in February, the San Jose-based tech giant had already cut approximately 4,000 jobs, leaving its workforce at about 80,000. The latest layoffs will bring this number down to around 75,000 employees.
In a regulatory filing with the U.S. Securities and Exchange Commission (SEC), Cisco detailed its restructuring plan aimed at cutting costs by $1 billion. These savings will largely come from severance packages, one-time termination benefits, and other expenses. Cisco anticipates recognizing between $700 million and $800 million of these costs in the first quarter of its fiscal year 2025, with the remainder being accounted for throughout the rest of the year.
The company’s focus has shifted towards artificial intelligence (AI) and cybersecurity. In June, Cisco committed $1 billion to support AI startups such as Cohere, Mistral, and Scale, as part of its strategy to drive innovation in AI solutions. Cisco has also formed a partnership with Nvidia to build advanced AI infrastructure.
Despite the looming layoffs, Cisco’s financial performance remains strong. The company reported $13.6 billion in revenue for the fourth quarter of its 2024 fiscal year, a 10% drop from the previous year, yet surpassing its guidance range. Following the earnings report, Cisco’s stock saw a boost of over 5% in after-hours trading, climbing to $48.11.
The layoffs reflect a broader trend within the tech industry. In 2024, several major players, including Intel, Microsoft, Amazon, and Google, have also trimmed their workforces in response to shifting priorities and economic pressures. Dell Technologies is another prominent name that has announced job cuts as part of a broader restructuring effort.
As Cisco navigates these changes, the company remains focused on positioning itself as a leader in AI and cybersecurity, even as it works to streamline operations.
