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Networking powerhouse Cisco Systems has announced a second round of job cuts in 2024.
The news comes as it grapples with declining demand and reorients its business towards high-growth areas like artificial intelligence (AI), Reuters reports. The latest restructuring plan will impact approximately 7% of Cisco’s global workforce, affecting around 6,000 employees.
This comes on the heels of Cisco’s underwhelming fourth-quarter and full-year 2024 financial results. While Cisco’s quarterly revenue reached $13.64 billion, beating Wall Street’s forecast of $13.54 billion, the company reported a 45% drop in quarterly net profit to the tune of $2.2 billion. This represents a 10% drop from the same quarter last year, marking the third straight quarter of declining sales.
Despite the company’s latest financial standings, Cisco’s CEO, Chuck Robbins, believes the company “delivered a strong close to fiscal 2024.” He highlighted steady customer demand and order growth, noting that customers increasingly depend on Cisco to connect and protect their organizations, particularly in the AI era.
This latest round of job cuts will be Cisco’s second this year following a 5% workforce reduction last February. It further reflects broader trends in the tech sector, where companies are reevaluating their operations and workforce in light of economic uncertainties and the rapid advancement of AI technologies.
Cisco’s foray into the AI sector gained traction after it announced in June that it had allocated $1 billion to fund AI startups and acquisitions in the space. The company’s $28 billion acquisition of cybersecurity firm Splunk in March 2024 also shows that it will be diversifying its portfolio, amid a positive cybersecurity stock outlook, which is estimated to reach around $146.9 billion by 2032.
