The company is reducing headcount despite posting strong result for FY24
Athira Sethu
Kochi, 20 September 2024
Cisco has announced another round of significant layoffs in which it is planning to lay off around 5,600 positions, which is 7% of its total workforce, a report in TechCrunch said.
This move is seen as another cost savings move caused by plummeting demand apart from realignment of resources towards investments in artificial intelligence (AI). This is the second significant job cut this year coming from the company, the report noted.
This round of layoffs has come on the heels of an earlier round of 4,000 job cuts made in February. This is uncertain as employees have not yet found out whether the cut is going to affect them or not as Cisco refused to go into details until mid-September.
Technology giants have been reducing workforce since last one and half years. More than 136,000 tech workers have lost their jobs across 422 companies by 2024 owing to falling demand and cost pressure.
Despite these challenges, Cisco remains optimistic for the future. The company’s CEO, Chuck Robbins, stated that he remains hopeful about the future rebound in demand for the company’s networking products. For the transition process, Cisco is restructuring its business to concentrate on high-growth businesses, especially in the fields of artificial intelligence and cybersecurity.
It is planning to spend $1 billion in AI startups to boost its AI capability. It also took another massive step into the field of cybersecurity when it acquired Splunk for $28 billion during the year.
While Cisco is reducing headcount to save costs, it has reported strong performance in FY24. For FY24, it reported a revenue of $53.8 billion and during FY25, the company expects to post revenue in the range of $55 billion to $56.2 billion. Cisco follows August-July financial year cycle.
