Cisco Systems (NASDAQ:CSCO) shares fell by over 1% Friday following a report from Reuters that the company plans to implement another round of layoffs in the next week.
According to Reuters, the U.S. networking equipment giant is preparing to cut thousands of jobs in what will be its second major layoff this year.
The upcoming layoffs are expected to affect a similar number of employees as the 4,000 job cuts announced in February, and they could even surpass that figure, the publication stated.
The announcement is likely to coincide with the company's fourth-quarter results, which are expected to be released as early as Wednesday, Reuters said, citing sources familiar with the matter.
This decision follows Cisco's ongoing efforts to shift its focus to higher-growth areas, including cybersecurity and artificial intelligence. The company, which is based in San Jose, California, has been grappling with sluggish demand and supply-chain constraints in its core business of routers and switches, Reuters noted.
These challenges have pushed Cisco to diversify its portfolio, including the $28 billion acquisition of cybersecurity firm Splunk in March, which aims to boost its subscription business and reduce reliance on one-time equipment sales.
Cisco employed around 84,900 people as of July 2023, but this figure does not reportedly reflect the job cuts from February.
The planned job cuts at Cisco are part of a broader trend in the tech industry, where companies have been trimming their workforces to offset significant investments in AI.
Citing data from Layoffs.fyi, Reuters added that more than 126,000 employees have been laid off across 393 tech companies since the start of the year.