Cisco Announces Second Round of Layoffs in 2024, Cutting 5,600 Jobs Amid AI Focus
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Cisco's second 2024 layoff: 5,600 jobs cut, shifts focus to AI growth
These layoffs reflect a broader trend in the technology sector, where many firms are cutting jobs in response to economic pressures and reduced demand. In 2024 alone, over 136,000 employees across 422 tech companies have been affected by layoffs. Cisco, which employed roughly 85,000 people before these cuts, is among them, the report said. In a move to realign its business focus, Cisco is investing in high-growth sectors such as AI and cybersecurity. The company has committed $1 billion towards AI startups and made a significant $28 billion acquisition of the cybersecurity firm Splunk. These initiatives are part of Cisco's broader effort to transition from its traditional networking equipment business to emerging technologies and subscription-based services, the report stated.
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Cisco lays off thousands in second round of job cuts
Cisco has reportedly laid off thousands of employees in its second round of job cuts for the year. The software company had announced it would reduce its head count by 7% or 5,600 employees in August. A report by Tech Crunch had revealed that the company had refused to say who would be affected by the layoffs until September 16 and did not offer any reason for the delay in letting them know. The outlet learned that the layoffs will be in the company's threat intelligence and security research unit, Talos Security. Tech layoffs 2024: Job cuts at Microsoft, Google, Apple, and other firms "Cisco announced a restructuring plan to allow it to invest in key growth opportunities and drive more efficiencies in the business," the company had noted in an SEC filing back in August. The company was planning to merge their security, networking and collaboration segments into one while looking to leverage AI technologies. Earlier in February, the San Jose-based company had fired around 4,000 employees. Published - September 19, 2024 11:56 am IST Read Comments
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Cisco Systems, the networking giant, has announced its second round of layoffs in 2024, cutting 5,600 jobs. The company is shifting its focus towards artificial intelligence and software-defined networking solutions.
Cisco's Major Workforce Reduction
Cisco Systems, the global leader in networking technology, has announced a significant workforce reduction, cutting 5,600 jobs in its second round of layoffs for 2024. This move affects approximately 5% of the company's global workforce, which stood at 84,900 employees as of July 29, 2023
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.Financial Impact and Restructuring Costs
The San Jose-based company expects to incur pretax charges of about $800 million related to the restructuring plan. These charges will primarily consist of severance and other one-time termination benefits, which are projected to be recognized in the third quarter of fiscal 2024
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.Strategic Shift Towards AI and Software-Defined Networking
Cisco's decision to downsize is part of a larger strategic shift. The company is realigning its workforce to focus on high-growth areas, particularly artificial intelligence (AI) and software-defined networking solutions. This move reflects the changing landscape of the tech industry and Cisco's efforts to stay competitive in an evolving market
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.Previous Layoffs and Industry Trends
This latest round of job cuts follows a previous layoff announcement in November 2023, where Cisco revealed plans to lay off 4,100 employees. The tech industry as a whole has been experiencing a wave of layoffs, with companies like Meta, Amazon, and Microsoft also announcing significant workforce reductions in recent months
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Market Response and Future Outlook
Despite the layoffs, Cisco's shares saw a modest increase of 0.3% in extended trading following the announcement. The company's focus on AI and software-defined networking is seen as a strategic move to position itself for future growth in these high-potential areas. However, the immediate impact on affected employees and the long-term implications for Cisco's operations remain to be seen
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.Industry-Wide Implications
Cisco's layoffs are part of a broader trend in the tech industry, where companies are reevaluating their workforce needs in light of economic uncertainties and shifting market demands. This restructuring highlights the ongoing transformation in the technology sector, with a growing emphasis on AI, cloud computing, and software-based solutions
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