Network equipment maker Cisco plans to cut thousands of jobs in its second round of layoffs this year as it shifts focus to higher-growth areas such as cybersecurity and artificial intelligence, according to people familiar with the matter.
The number of people affected could be the same or slightly higher than the 4,000 employees Cisco laid off in February and is expected to be announced as early as Wednesday along with the company’s fourth-quarter earnings, said the people, who were not authorized to speak publicly.
Reuters exclusively reported on the job cuts announced by San Jose, California-based Cisco in February before the company made the announcement.
The company will employ about 84,900 people as of July 2023, according to its annual report. That figure does not include the job cuts made in February.
Cisco did not immediately respond to a Reuters request for comment.
Cisco, the largest maker of routers and switches that direct internet traffic, has been struggling with weak demand in its core business and supply chain constraints.
This has led the company to diversify its business, including with its $28 billion acquisition of cybersecurity company Splunk, which closed in March, which will expand its subscription business and reduce its reliance on one-off device sales.
The company has been working to incorporate AI products into its products, and in May reiterated its goal of winning $1 billion worth of AI product orders in 2025. In June, it launched a $1 billion fund to invest in AI startups such as Cohere, Mistral AI, and Scale AI.
At the time, the company said it had made 20 AI-focused acquisitions and investments over the past few years.
The job cuts are the latest in a tech industry sweep of cost-cutting measures this year to offset big investments in AI.
More than 126,000 jobs have been laid off at 393 tech companies so far this year, according to data from tracking website Layoffs.fyi.
In early August, chipmaker Intel cut about 17,500 jobs, or more than 15%, in an effort to shore up its loss-making manufacturing operations.
