Cisco, a US technology corporation, has fired off thousands of employees after announcing a second large employment cut earlier this year, according to TechCrunch. The decision comes as the corporation faces diminishing demand and the need to cut expenses, especially as it invests extensively in AI.
In August, the corporation slashed almost 7% of its workforce, or 5,600 people, following a 4,000-person layoff in February.
“Cisco is optimistic about rebounding demand for our networking equipment,” Cisco CEO Chuck Robbins had said. As part of its approach, Cisco is restructuring to focus on high-growth sectors, investing $1 billion in Al companies and paying $28 billion for cybersecurity business Splunk.
Cisco anticipates major costs connected with a restructuring plan.
These charges are expected to total up to $1 billion before taxes. A large amount of these expenditures, ranging from $700 million to $800 million, are likely to be recognized in the first quarter of the fiscal year.
The corporation had around 85,000 employees at the end of its latest 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 organizations.
Examining Cisco’s approach to the present economic conditions and layoffs:
Cisco focuses on subscription-based services.
Cisco’s $28 billion acquisition of Splunk in March represents a strategic shift toward subscription-based services. Cisco, generally recognized for networking equipment, made a huge shift by entering the competitive cybersecurity sector alongside players like Palo Alto Networks, Check Point, CrowdStrike, and Microsoft, as ET followed this development.
Cisco’s funding to Al startups
Since 2018, Cisco has been heavily invested in the Al area, acquiring Accompany and CloudCherry to broaden its foothold in this fast-evolving technology. In 2019, the company introduced the Silicon One ASIC chip, which offers speeds of 25.6 Tbit/s and competes directly with Intel and Nvidia.
Cisco has allocated $1 billion to fund Al startups.
Cisco formed a partnership with Nvidia earlier in February. The latter decided to combine Cisco’s Ethernet with its own technology, which is commonly used in data centers and Al applications. In June, Cisco invested in Al startups such as Cohere, Mistral Al, and Scale Al. The corporation announced that it has undertaken 20 Al-related acquisitions and investments in recent years.
Focus on emerging technologies
Cisco provides data center technologies, including the Unified Computing System (UCS) and Nexus switches, to serve modern data centers and cloud environments. Furthermore, collaborative solutions like WebEx and Cisco Jabber improve communication and productivity.
Shifting focus on cybersecurity
Since 2013, Cisco has improved its security portfolio by acquiring Sourcefire, a network security and threat detection company. Open DNS, purchased in 2015, offers cloud-based threat detection and prevention.
CloudLock, a cloud security solutions firm worth $293 million, protects people and data in cloud settings. Duo Security, which costs $2.35 billion, offers cloud-based authentication and access control.
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