By Utkarsh Shetti and Supantha Mukherjee
(Reuters) -Cisco will cut thousands of jobs this year in a second round of layoffs as the U.S. networking equipment maker shifts focus to higher-growth areas including cybersecurity and AI, people familiar with the matter said.
The number of people affected could be similar to or slightly higher than the 4,000 employees Cisco (NASDAQ:) laid off in February, and will likely be announced as early as Wednesday with the company’s fourth-quarter results, the company said. sources, which were not. authorized to speak in public.
Reuters exclusively reported the job cuts San Jose, California-based Cisco announced in February, before the company announced them.
The company employed approximately 84,900 people as of July 2023, according to its annual filing. That number does not take into account the layoffs in February.
Cisco did not immediately respond to a request for comment.
Shares fell nearly 1% after Reuters first reported the cuts. The stock is down more than 9% this year from Thursday’s closing price.
Cisco, the largest manufacturer of routers and switches that manage Internet traffic, is struggling with sluggish supply and demand chain constraints in its major businesses.
That has prompted the company to diversify with moves such as its $28 billion acquisition of cybersecurity company Splunk (NASDAQ:), which it completed in March. The acquisition will reduce dependence on one-off equipment sales by increasing subscription business.
The company has been trying to incorporate AI products into its offerings, and in May reiterated its target of $1 billion in AI product orders by 2025. In June, it launched a $1 billion fund to invest in AI startups such as Cohere, Mistral AI and scale AI. The company said at the time that it had made 20 AI-focused acquisitions and investments in recent years.
The layoffs are the latest in the tech industry, which has cut costs this year to offset major investments in AI.
More than 126,000 people have been laid off from 393 tech companies since the start of the year, according to data from tracking website Layoffs.fyi.
Earlier in August, chipmaker Intel (NASDAQ:) cut more than 15% of its workforce, or about 17,500 people, as it tried to turn around its money-losing manufacturing operations.
