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Cisco to lay off thousands of workers

 Published: 12:35, 15 February 2024

Cisco to lay off thousands of workers

US tech company Cisco is cutting thousands of jobs as part of a restructuring plan, the computer networking giant announced Wednesday.

About 5% of Cisco's global workforce will be affected by the layoffs, the Silicon Valley-based company said while announcing its latest quarterly earnings figures.

Cisco ended 2023 with nearly 85,000 employees, according to its website.

Analysts say that tech layoffs could become a new normal for Silicon Valley in a big pivot to artificial intelligence.

The cuts are not on the same scale as in late 2022 and early 2023 when tech companies got rid of hundreds of thousands -- a blowback from the hiring frenzy during the pandemic when companies ramped up employee counts as everyday life turned online.

Cisco late last year agreed to buy cybersecurity company Splunk in a $28 billion deal, its biggest ever acquisition.

Cybersecurity has grown into a huge business for tech companies and the deal puts Cisco, known mostly for routers and network equipment, on par with rivals Palo Alto Networks, Check Point, CrowdStrike and Microsoft, analysts said.

Cisco reported revenue of $12.8 billion in the fiscal quarter that ended in late January, down 6% from the same quarter a year earlier.

The company said it made a profit of $2.6 billion, about 5% less than it did in that quarter a year ago.

"We continue to align our investments to future growth opportunities," Cisco chief executive Chuck Robbins said in an earnings release.

"Our innovation sits at the center of an increasingly connected ecosystem and will play a critical role as our customers adopt AI and secure their organizations."

Cisco shares slid more than 5% to $47.65 in after- market trades that followed release of the earnings figures.