The Cisco logo is displayed during the Mobile World Congress (MWC) of the GSMA 2023 in Barcelona, Spain, March 1, 2023. REUTERS/Nacho Doce/File photoNEW DELHI: Cisco will lay off 7% of its global workforce as the U.S. telecommunications equipment maker looks to invest in high-growth sectors such as artificial intelligence (AI), cloud and cyber security.
“We remain laser-focused on growth and consistent execution as we invest to win in AI, cloud and cybersecurity. To focus on these key priority areas, we today announced a restructuring plan that will allow us to both invest in important growth opportunities and drive greater efficiencies across our business,” said Charles H. Robbins, chairman and CEO of Cisco, during the company’s Q4 2024 post-earnings call with analysts.
Cisco expects the restructuring plan to result in pre-tax costs of up to $1 billion.
The San Jose, California-headquartered company announced in February that it would lay off 5% of its global workforce, affecting 4,000 jobs.
The company, which makes routers and switches, has recently focused on AI and cybersecurity and has struggled with declining demand for its core networking businesses.
As part of its diversification, Cisco completed its $28 billion acquisition of cybersecurity firm Splunk in March, which is expected to boost its subscription business and reduce its reliance on one-off equipment sales.
In June, the company also launched a $1 billion fund to invest in AI startups including Cohere, Mistral AI and Scale AI.
“Networking remains incredibly important to us and we will continue to support that space,” said Richard Scott Herren, executive vice president and chief financial officer, Cisco. “But we are looking for efficiencies as we look at the business in every way possible so that we can deploy those resources in the fastest-growing spaces.”
In addition, the gear manufacturer is integrating its network, security and collaboration teams into one organization, which will be led by Jeetu Patelwho will now take on an expanded role as Executive Vice President and Chief Product Officer.
The CEO said in a separate blog that Jonathan Davidson is stepping down from his current role as Director of Cisco Networking and will serve in an advisory role.
“As we complete the full integration of Splunk into Cisco, the Splunk product line will also be integrated into this new organization at the right time, bringing our entire product portfolio together as one team,” Robbins said.
