Cisco lays off thousands as it shifts focus to AI, cybersecurity

Cisco lays off thousands as it shifts focus to AI, cybersecurity is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• Cisco plans to lay off 7% of its workforce, or about 5,900 people, to move into AI and cybersecurity.
• Despite a drop in fiscal fourth-quarter earnings, the stock is up, and earnings and revenue are expected to grow modestly in the current quarter.

OUR TAKE
Layoffs are both a challenge and an opportunity for Cisco. It may affect core functions and business continuity, lower the morale of current employees, and raise public opinion issues. At the same time, however, it can help reduce costs, improve efficiencies, facilitate focus on the core business, and provide opportunities for organisational restructuring and innovation. Cisco needs to ensure that the downsizing process is fair and equitable, and that it is used to drive long-term stability.
— Iydia Ding, BTW reporter

What happened

Cisco plans to lay off 7 per cent of its workforce, or about 5,900 people, in the company’s second round of job cuts this year as it shifts its focus to technology in fast-growing areas such as AI and cybersecurity. Cisco’s shares rose despite a drop in earnings in the company’s fiscal fourth quarter, with earnings and revenue expected to grow modestly in the current fiscal quarter.

The San Jose, California-based company did not specify the number of layoffs. In February, Cisco announced it would lay off about 4,000 workers. The networking equipment maker also said in June that as of July 2023, it had 84,900 employees. Based on that figure, the number of layoffs would be about 5,900.

It will invest $1 billion in tech startups such as Cohere, Mistral and Scale to develop reliable AI products. The company also recently announced a partnership with Nvidia to develop infrastructure for AI systems.

Also read: Intel to lay off 15,000 employees amid financial challenges

Also read: Google lays off at least 100 jobs across its cloud unit

Why it’s important

Layoffs can have a multifaceted impact on Cisco’s long-term growth, presenting both challenges and opportunities.

The loss of human resources may affect the company’s core functions and key positions, which in turn may affect the functioning of the organisation and business continuity. Improper layoff operations may affect the motivation of current employees and cause a public outcry.

But optimistically, layoffs can help reduce labour costs, improve efficiency and profitability, and drive the company to focus more on its core business and key areas. In addition, layoffs may also be an opportunity for the business to make organisational restructuring and changes, providing an opportunity for the business to introduce creative thinking and flexibility to promote change and innovation.

Therefore, Cisco needs to appropriately handle various issues in the process of layoffs to ensure the fairness, impartiality and transparency of layoff decisions, and at the same time use the process to drive organisational development and change for long-term stable development.