Cisco to Layoff 7% of Global Workforce to Focus on AI and Security
Cisco Systems, Inc. announced it will layoff approximately 7 percent of its global workforce, or approximately 5,000 employees.
Cisco Systems, Inc. announced it will cut approximately 7 percent of its global workforce after reporting fourth-quarter revenues of $13.6 billion, a 10 percent decrease from the previous year. These cuts are expected to impact about 5,000 employees and cost the company up to $1 billion. Most layoffs are expected between August and October, Cisco’s first quarter of the 2025 fiscal year, for which $700-800 million has been allocated.
These layoffs come eight months after the company announced it would cut 4,000 jobs, representing a 5 percent reduction in staff. These cuts were announced following lowered earnings expectations after the second quarter results.
Cisco’s revenue from networking hardware products decreased by 28% year over year due to slowed hardware sales. However, in the earnings call, CEO Chuck Robbins said that “enterprise customers are upgrading their infrastructure in preparation for AI” and that companies are using funds earmarked for AI projects to modernize their infrastructure.
Scott Herren, Cisco’s CFO, said that the layoffs were “not about cost savings…but about finding efficiencies across the company” and that funds were reallocated into the fastest-growing areas—AI, cloud, and cybersecurity.
In March of 2024, Cisco acquired Splunk, an analytics and security company, for $28 billion. This acquisition helped Cisco’s product orders grow an additional 8 percent and increased the company’s reach in the enterprise and public sector markets.
Takeaways
As cybersecurity incidents continue to increase in both size and scope, the market for trustworthy security tools that can provide real-time analysis and threat response will continue to grow. Like many companies that initially started out selling hardware, Cisco has been diversifying into subscription services for security, collaboration, and networking monitoring. The Splunk acquisition brought AI-powered security tools into the Cisco product portfolio, which puts the company in a position to deliver innovative enterprise security products and services.
MORE ON TECH LAYOFFS
