Cisco Systems, a leading technology company based in San Jose, California, has announced its plans to reduce its workforce by 7%, marking its second round of job cuts this year. The company aims to realign its focus towards rapidly growing sectors in technology, such as artificial intelligence and cybersecurity.
While the exact number of job cuts was not specified, Cisco had a total of 84,900 employees as of July 2023, indicating that approximately 5,900 jobs may be affected. Earlier this year, in February, Cisco had announced a reduction of about 4,000 jobs.
In a strategic move towards innovation, Cisco revealed its intention to invest $1 billion in tech startups like Cohere, Mistral, and Scale to enhance the development of reliable AI products. Additionally, the company recently formed a partnership with Nvidia to work on infrastructure for AI systems.
These layoffs by Cisco come shortly after Intel Corp. announced its decision to cut around 15,000 jobs as part of its efforts to revamp its business and compete more effectively with industry rivals like Nvidia and AMD. Following the announcement, Intel's stock experienced a significant decline, while Cisco's shares saw a 6% increase in after-hours trading on Wednesday.
Furthermore, Cisco has ventured into the realm of cybersecurity, launching a cybersecurity readiness index earlier this year to assist businesses in evaluating their resilience against cyber threats.
For the fiscal fourth quarter ending on July 27, Cisco reported earnings of $2.16 billion, or 54 cents per share, representing a 45% decrease from the same period last year. Adjusted earnings, excluding special items, stood at 87 cents per share in the latest quarter. Revenue also experienced a decline of 10%, dropping to $13.64 billion from $15.2 billion.
Analysts had anticipated adjusted earnings of 85 cents per share on revenue of $13.54 billion, according to a poll by FactSet.
