Cisco plans to slash thousands more jobs amid AI, cybersecurity push

Cuts reportedly to come as soon as Wednesday's earnings release

Updated Networking goliath Cisco will reportedly slash thousands of jobs as it focuses on growing its cybersecurity business and capitalizing on AI demand.

According to a Reuters report citing unknown persons "familiar with the matter," the second round of layoffs is expected to be similar in scope, or potentially slightly larger than the last round in February, when about 4,000 employees were laid off. As of July 2023, Cisco employed 84,900 workers.

The official announcement could come as soon as Wednesday when Cisco is due to share its fourth-quarter results, sources told the news wire.

Cisco had "no comment on rumors" to share.

The report comes as Cisco prepares for another challenging quarter. The network vendor previously forecast Q4 revenues of $13.4-$13.6 billion, down about 11 percent year over year.

In addition to declining revenues, the firm has also grappled with falling profits. In Q3, Cisco saw its net income plunge 41 percent YoY from $3.2 billion to $1.9 billion.

In a bid to fortify its financials, Cisco has made a concerted effort to diversify its offerings. The most recent example of this has been the acquisition of data cruncher Splunk, which employed 7,000 workers as of March when the deal closed.

These efforts haven't come cheap, however, adding Splunk's expertise to its portfolio cost Switchzilla $28 billion.

Cisco has also been working to establish itself as an AI networking vendor. As we've previously reported, the vast majority of large scale AI deployments utilize Nvidia's InfiniBand network switches and NICs. However, over the past year, we've seen vendors begin pushing Ethernet as an alternative to InfiniBand.

At Cisco Live EU in February, Cisco announced a series of hardware and software platforms developed in collaboration with Nvidia designed to peddle its Ethernet kit to enterprises deploying GPU clusters or AI inference and training.

Cisco has also thrown its weight behind the Ultra Ethernet Consortium, which aims to develop an Ethernet-based interconnect technology optimized for high-performance computing and AI workloads. You can learn more about the emerging network tech on our sibling site The Next Platform here. The firm hopes to realize $1 billion worth of AI product orders by the end of its 2025 fiscal year which ends in mid 2026.

Cisco wouldn't be the only company to announce layoffs in recent weeks. Amid a $1.6 billion loss, Intel earlier this month announced it would lay off more than 16,000 workers or about 15 percent of its global workforce and curb capital expenses in a bid to cut $10 billion in spending in 2025.

Meanwhile last week, Dell revealed it was also culling its workforce by a considerable margin as it looks to streamline operations to better unlock "the value of modern IT and AI."

While Dell did confirm the layoffs, it isn't clear how deep they'll cut. Some estimates hover in the 10 percent or 12,500 employee range. ®

Updated to add on August 14

Cisco in releasing its fiscal Q4 financial figures [PDF] today said it was laying off seven percent of its global workforce, or about 6,000 of 85,000.

The biz banked sales of $53.8 billion, down six percent year on year, for the fiscal year to July 27, and a $10.3 billion profit, down 18 percent.