Networking company Cisco said it’s planning to cut 5% of its global workforce as part of a larger restructuring plan announced this month.
As of July 2023, Cisco reported almost 85,000 employees which means the more than 4,000 jobs lost. The company said it will pay about $800 million in severance and other related costs.
Cisco is just one of many tech companies that have announced layoffs over the last year. Amazon, Meta, Google’s parent company Alphabet, Microsoft, Dell, and more have collectively eliminated thousands of positions, according to CNBC.
The layoffs come as the tech industry was disproportionately hurt by inflationary pressures and a consumer spending environment that’s been mixed, leading to weaker spending on ads. Cisco, which supplies networking equipment to other companies, felt the impact of its business customers pulling back on spending themselves.
In its second quarter earnings report, Cisco said the restructuring plan is meant to “realign the organization and enable further investment in key priority areas.”
One of those focus areas is artificial intelligence.
“We continue to align our investments to future growth opportunities. 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 CEO Chuck Robbins said in the report.
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