Worldwide technology leader Cisco has announced a second major round of layoffs this year, cutting approximately 5,600 jobs, which accounts for about 7% of its global workforce. The layoffs come as part of the company's broader strategy to manage costs in response to declining demand while shifting focus towards high-growth sectors like artificial intelligence (AI) and cybersecurity.

This follows an earlier reduction in February when Cisco let go of around 4,000 employees. The uncertainty surrounding the latest round of cuts left employees anxious, with details about affected departments not revealed until mid-September. Divisions like Talos Security, Cisco's threat intelligence and security research group, were notably impacted.

Despite these cuts, Cisco reported nearly $54 billion in revenue for 2024, its second-best financial year. The company argues that the layoffs will help it invest in key growth opportunities and drive operational efficiency. CEO Chuck Robbins remains optimistic, expecting a rebound in demand for networking equipment in the coming months.

Cisco is making significant moves to transition beyond its traditional hardware business, with a focus on AI, subscriptions, and cybersecurity. The company has committed $1 billion to invest in AI startups, with recent investments in companies like Cohere, Mistral AI, and Scale AI. Additionally, Cisco's $28 billion acquisition of cybersecurity firm Splunk marks its intent to strengthen its presence in the cybersecurity market.

However, the layoffs highlight the challenges facing the tech industry, which has seen widespread job cuts in 2024. Across the sector, major players like Google, Amazon, Microsoft, SAP, and Intel have announced layoffs, with over 140,000 employees impacted across 438 companies this year, according to Layoffs.fyi.

As Cisco pivots to a new strategy centered on AI and cloud-based services, the human cost of this transition remains significant. While the company positions itself for future growth, the layoffs reflect a broader industry shift and the sobering realities of progress in the tech world.