Information technology and software maker Cisco has announced plans to cut about 4,250 employees to focus on artificial intelligence.
The layoffs will represent about 5% of the company’s approximately 85,000 employees worldwide, and will cost the company $800 million before taxes in severance and benefits payments to departing employees.
CEO Chuck Robbins told investors that while the company will continue to invest in future growth opportunities, the company’s innovations are “located at the center of an increasingly connected ecosystem where customers are adopting AI.” and will play an important role in protecting the organization.”
Robbins made this despite the fact that fewer than one in five companies surveyed by Cisco said they were ready to integrate AI.
Statement provided during the second quarter earnings report The company’s revenue was $12.8 billion, down 6% from the previous year.
However, Cisco still has $800 million in operating cash flow and returned $2.8 billion to shareholders. As pointed out by new york postThe company also lowered its full-year revenue forecast by about $3 billion, now expecting it to be between $51.5 billion and $52.5 billion.
About a week before this report, Cisco announced a partnership with chipmaker Nvidia to provide customers with a “simplified cloud-based and on-premises AI infrastructure.”This will help support “advanced AI workloads,” Robbins said. explained.
Cisco is increasing its customer base’s reliance on artificial intelligence andCisco AI Readiness Index” is a survey of more than 8,000 private and business IT leaders.
The survey found that 84% of companies believe AI will have at least a “significant impact” on their business in the future. However, only 14% of respondents said they were fully ready to integrate AI into their business.
This number was followed by a Cisco command prompt that said, “Enterprises need to be AI ready.”
According to the survey, the top sectors currently implementing AI services are IT infrastructure companies (84%) and cybersecurity companies (83%).
Cisco estimates that generative artificial intelligence (AI that generates content in response to prompts) could add up to $4.4 trillion to global GDP each year.
Perhaps this comes at the cost of cutting ties with human employees, as Cisco has made clear in its strategy.
In 2023, Cisco went all-in to help students personalize their learning experience with GenAI.Cisco said it would provide input TeachAIa new AI resource for educators formed by the World Economic Forum.
“First listing” to teach AIvalue” said it focused on “emphasizing equity and centering the needs of students and educators.”
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