Shares of Cisco Systems (NASDAQ:) fell more than 1% on Friday after a Reuters report that the company plans to implement another round of layoffs in the coming week.
According to Reuters, the US networking equipment giant is preparing to cut thousands of jobs, which will be its second major layoffs this year.
The coming layoffs are expected to affect a similar number of employees as the 4,000 job cuts announced in February, and could even exceed that figure, the release said.
The announcement is likely to coincide with the company’s fourth-quarter results, which are expected to be released as soon as Wednesday, Reuters said, citing sources familiar with the matter.
This decision follows Cisco’s continued efforts to shift its focus to higher growth areas, including cybersecurity and artificial intelligence. The company, based in San Jose, California, is struggling with sluggish demand and supply chain constraints in its core router and switch businesses, according to Reuters.
These challenges have prompted Cisco to diversify its portfolio, including its $28 billion acquisition of cybersecurity company Splunk in March, which aims to boost its subscription business and reduce its reliance on one-time equipment sales.
Cisco employed about 84,900 people as of July 2023, but this figure reportedly does not reflect job losses from February.
The planned job cuts at Cisco are part of a broader trend in the technology industry, where companies have reduced their workforces to offset significant investments in AI.
Citing data from Layoffs.fyi, Reuters added that more than 126,000 workers at 393 tech companies have been laid off since the start of the year.
