Second Round of Cisco Layoffs: Is a Recession Coming?

Cisco Systems has announced a second round of layoffs this year, affecting thousands of employees. This follows a previous round of job layoffs announced in February. The decision comes as Cisco struggles with decreasing demand and the need to cut expenses, especially as it invests extensively in artificial intelligence (AI).

According to TechCrunch, Cisco, a US technology corporation, has fired off thousands of employees after announcing a second large employment cut earlier this year. The decision comes as the corporation faces diminishing demand and the need to cut expenses, primarily as it invests extensively in AI. Earlier in August, the corporation announced a 7% employment cut, or around 5,600 people, following a February layoff that affected 4,000 employees. "Cisco is optimistic about the rebounding demand for our networking equipment," Cisco CEO Chuck Robbins stated. As part of this approach, Cisco is restructuring to focus on high-growth areas, investing $1 billion in AI companies and paying $28 billion for cybersecurity firm Splunk.

Cisco has announced a second round of layoffs this yearcisc

Cisco has announced a second round of layoffs this year, following the last round that affected 4,000 employees. The corporation is restructuring its operations to focus on high-growth sectors, including artificial intelligence, investing $1 billion in AI startups and spending $28 billion to acquire cybersecurity firm Splunk. This restructuring will result in significant expenditures, possibly up to $1 billion before taxes. Despite these obstacles, Cisco's CEO is confident that demand for the company's networking equipment will revive.

Cisco's layoffs are primarily motivated by a desire to minimise expenses while focussing on high-growth sectors such as artificial intelligence. The company is experiencing diminishing demand for its products and services, and the layoffs are part of an effort to streamline operations and increase efficiency.

Why Are Layoffs Happening at Cisco?

Cisco is also significantly investing in AI, allocating $1 billion to AI companies and paying $28 billion for cybersecurity firm Splunk. These investments need significant resources, and layoffs may be used to free up funding for these programs. Cisco anticipates substantial costs connected with a restructuring plan. These charges are expected to total up to $1 billion before taxes. A considerable percentage of these expenditures, ranging from $700 million to $800 million, are projected to be recognised in the first quarter of the fiscal year.

The corporation has around 85,000 employees at the end of its last fiscal year. In August, the technology sector experienced a wave of layoffs that affected nearly 27,000 individuals. Major tech companies such as Intel, IBM, and Cisco, as well as countless startups, have announced significant employment losses. This raises the overall number of IT layoffs this year to more than 136,000, spread among 422 organisations.

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