Cisco Systems lays off 7% of staff for AI and cybersecurity

Cisco Systems, a leading provider of computer networking technology, has announced plans to reduce its workforce by approximately 7%, translating to around 6,000 jobs. This decision marks the company's second major round of layoffs in 2023, following the elimination of 4,000 positions in February. The announcement comes in the wake of a recent earnings report revealing a 45% decline in net income, totaling $2.16 billion, and a 10% drop in revenue to $13.64 billion. Despite these challenges, Cisco's performance exceeded Wall Street expectations, resulting in a nearly 6% increase in stock value during after-hours trading. The layoffs reflect Cisco's strategic pivot towards artificial intelligence and cybersecurity, areas that have gained prominence in the tech industry. Historically, Cisco has been a dominant player in Silicon Valley, even achieving the status of the world's most valuable publicly traded company during the dot-com boom. However, it has faced increasing competition from firms specializing in cloud computing services. In response, Cisco aims to enhance its profitability and market relevance by focusing on emerging technologies. In a statement, CEO Chuck Robbins emphasized the company's commitment to integrating its recent $28 billion acquisition of cybersecurity firm Splunk into its product offerings. Additionally, Cisco plans to streamline its operations by merging its networking, security, and collaboration departments under the leadership of Jeetu Patel, signaling a comprehensive approach to adapt to the evolving tech landscape.