Cisco, a major technology company, revealed on Wednesday its plan to reduce its global workforce by 5%, which translates to thousands of employees losing their jobs. This decision comes as part of a broader restructuring effort within the company.
“We continue to align our investments to future growth opportunities,” Cisco CEO Chuck Robbins said in the company’s second quarter earnings release. “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 nearly 85,000 employees globally, the layoffs are expected to impact over 4,000 individuals. Cisco plans to initiate these job cuts throughout this year and the next, estimating the cost of severance and termination benefits to be close to $800 million.
“The combination of these two innovative leaders makes them well positioned to lead in security and observability in the age of AI,” Cisco said in a September press release announcing the deal.
Despite their strategic moves towards AI, Cisco reported a 6% decrease in revenue and a 3% decline in earnings-per-share for the fiscal second quarter. This highlights the challenges the company is facing amid the evolving tech landscape.
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The tech industry as a whole has witnessed a wave of layoffs, despite heavy investments in AI. Notable companies like Google, Amazon, PayPal, and Duolingo have all announced job cuts recently. Since the beginning of 2024, over 34,000 tech workers have been affected by layoffs, indicating a broader trend within the sector.
