Cisco has revealed plans to reduce its workforce by 5% to increase its focus on artificial intelligence. The technology giant has approximately 4,250 employees worldwide.
San Jose, Calif.-based Cisco said the layoffs will cost the company about $800 million in pre-tax losses related to severance and benefits, and will increase the company’s investment in high-growth areas such as AI and software development. He said he would be able to focus more on his work.
“Our innovation is at the center of an increasingly connected ecosystem, and as our customers adopt AI,” Cisco CEO Chuck Robbins told investors Wednesday. , will play an important role in protecting the organization.”
The company, an IT and software manufacturer with approximately 85,000 employees worldwide, announced layoffs at its quarterly results and earnings conference, and forecast annual sales of between $55 billion and $51.5 billion to $52.5 billion. reduced to the dollar.
“We also continue to see weak demand from our carrier and cable service provider customers,” Robbins added during the conference call.
As part of its AI push, Cisco earlier this month announced the next phase of its partnership with chip giant Nvidia, calling it a “simplified cloud-based and The aim is to provide on-premises AI infrastructure to enterprises. ” Robbins said.
Robbins also said Nvidia has agreed to use Cisco’s Ethernet with its own technology, which is widely used in data centers and AI applications.
In the second quarter of fiscal 2024, Cisco posted adjusted earnings of 87 cents per share and revenue of $12.79 billion, both of which beat LSEG’s expectations.
Cisco is the latest technology company to downsize so far in 2024. Earlier this month, Snap announced it would lay off 10% of its employees.
Based on the approximately 5,400 employees announced by the company as of September last year, this series of layoffs may have affected approximately 540 employees.
And last month, Alphabet was reportedly prepared to lay off dozens of people at its secretive X-Labs division. XLab is an innovation lab working on high-tech projects like the Wing delivery drone. Loom, the balloon internet network. Makani is a kite that generates wind energy.
With the layoffs, Snap may be looking to emulate the recent success of one of its main rivals, Facebook and Instagram’s parent company Meta.
Meta’s global workforce was 67,317 at the end of 2023, a 22% decrease from the previous year.
Elsewhere, eBay, which is struggling in the online marketplace, laid off 9% of its workforce, or about 1,000 people.
Microsoft, Amazon, and SAP also announced job cuts.
