Networking giant Cisco Systems is poised to announce another significant round of layoffs, potentially affecting thousands of employees, as the company shifts its focus towards high-growth areas such as cybersecurity and artificial intelligence.

This move, originally reported by Reuters, marks the second major job cut for the San Jose-based firm this year.

Sources familiar with the matter told the newswire that the number of affected employees could be similar to or slightly higher than the 4,000 staff let go in February. The announcement is expected to coincide with Cisco's fourth-quarter results, which are due to be released as early as Wednesday.

As of July 2023, Cisco employed approximately 84,900 people worldwide, according to its annual filing. This figure, however, does not account for the previous round of layoffs earlier this year.

The company has been grappling with sluggish demand and supply-chain constraints in its core business. This challenging environment has prompted Cisco to diversify its operations, exemplified by its recent 28-billion-dollar acquisition of cybersecurity firm Splunk, completed in March.

Cisco's strategic pivot aims to reduce its reliance on one-time equipment sales by bolstering its subscription-based services. The company has also been actively incorporating AI products into its offerings, reiterating its target of 1 billion dollars worth of AI product orders by 2025. In June, Cisco launched a 1-billion-dollar fund to invest in AI startups, including Cohere, Mistral AI, and Scale AI.

The impending job cuts at Cisco are part of a broader trend in the tech industry, which has seen widespread layoffs as companies seek to offset substantial investments in AI technology. According to data from the tracking website Layoffs.fyi, over 126,000 people have been laid off across 393 tech companies since the beginning of the year.

This news follows recent announcements from other tech giants, such as chipmaker Intel, which recently cut more than 15 per cent of its workforce – approximately 17,500 employees – as it attempts to revitalise its loss-making manufacturing business.

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