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Networking giant Cisco Systems is pivoting to capitalise on emerging technologies, having committed $1 billion in June this year to invest in Artificial Intelligence (AI) startups.
The firm is also said to have recently acquired cyber-security firm Splunk for $28 billion.
The company, in a bid to focus on high-growth sectors such as AI and cyber security, has announced plans to lay off about seven per cent of its global workforce, roughly 6,000 employees.
This decision reportedly followed a 10% decline in the company's quarterly revenue.
This marks Cisco's second major round of job cuts in 2024.
While the firm did not specify the exact number of positions to be eliminated, the 7% reduction could affect around 6,000 employees based on its reported workforce of 84,900 as of July 2023.
The company previously laid off 4,000 workers in February as it reported a 10% year-over-year decline in quarterly revenue to $13.64 billion.
However, this still exceeded market expectations of $13.54 billion.
"Cisco announced a restructuring plan to allow it to invest in key growth opportunities and drive more efficiencies in its business," the company stated in an SEC filing.
Cisco expects to recognise pre-tax charges of up to $1 billion related to the restructuring, with $700-800 million being recognised in the first quarter of fiscal 2025.
Despite the retrenchment, Chief Executive Officer (CEO) Chuck Robbins expressed optimism about rebounding demand for Cisco's networking equipment.
"Inventory digestion is complete and we're now returning to a more normalised demand environment," Robbins told analysts.
As part of the restructuring, Cisco is also said to have planned to combine its networking, security and collaboration departments into a single organisation.
The company forecasts first-quarter revenue between $13.65 billion and $13.85 billion, above projections by business analysts.
