Cisco plans to slash 4,000 more jobs amid AI, cybersecurity push
- Reference: 1723487348
- News link: https://www.theregister.co.uk/2024/08/12/cisco_job_cuts/
- Source link:
According to a Reuters [1]report citing unknown persons "familiar with the matter," the second round of layoffs is expected to be similar in scope, or potentially slightly larger than the [2]last round in February, when about 4,000 employees were laid off. As of July 2023, Cisco employed 84,900 workers.
The official announcement could come as soon as Wednesday when Cisco is due to [3]share its fourth-quarter results, sources told the news wire.
[4]
Cisco had "no comment on rumors" to share.
[5]
[6]
The report comes as Cisco prepares for another challenging quarter. The network vendor previously [7]forecast Q4 revenues of $13.4-$13.6 billion, down about 11 percent year over year.
In addition to declining revenues, the firm has also grappled with falling profits. In Q3, Cisco saw its net income plunge 41 percent YoY from $3.2 billion to $1.9 billion.
[8]
In a bid to fortify its financials, Cisco has made a concerted effort to diversify its offerings. The most recent example of this has been the [9]acquisition of data cruncher Splunk, which employed 7,000 workers as of March when the deal closed.
These efforts haven't come cheap, however, adding Splunk's expertise to its portfolio cost Switchzilla $28 billion.
Cisco has also been working to establish itself as an AI networking vendor. As we've previously [10]reported , the vast majority of large scale AI deployments utilize Nvidia's InfiniBand network switches and NICs. However, over the past year, we've seen vendors begin pushing Ethernet as an alternative to InfiniBand.
[11]
At Cisco Live USA in February, Cisco [12]announced a series of hardware and software platforms developed in collaboration with Nvidia designed to peddle its Ethernet kit to enterprises deploying GPU clusters or AI inference and training.
Cisco has also thrown its weight behind the Ultra Ethernet Consortium, which aims to develop an Ethernet-based interconnect technology optimized for high-performance computing and AI workloads. You can learn more about the emerging network tech on our sibling site The Next Platform [13]here . The firm hopes to [14]realize $1 billion worth of AI product orders by the end of its 2025 fiscal year which ends in mid 2026.
[15]Intel to shed at least 15% of staff, will outsource more to TSMC, slash $10B in costs
[16]Infineon announces layoffs as Q3 results disappoint
[17]Dell starts new round of layoffs while it looks to 'unlock modern AI'
[18]Kaspersky culls staff, closes doors in US amid Biden's ban
Cisco wouldn't be the only company to announce layoffs in recent weeks. Amid a $1.6 billion loss, Intel earlier this month [19]announced it would lay off more than 16,000 workers or about 15 percent of its global workforce and curb capital expenses in a bid to cut $10 billion in spending in 2025.
Meanwhile last week, Dell [20]revealed it was also culling its workforce by a considerable margin as it looks to streamline operations to better unlock "the value of modern IT and AI."
While Dell did confirm the layoffs, it isn't clear how deep they'll cut. Some estimates hover in the 10 percent or 12,500 employee range. ®
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[1] https://www.reuters.com/technology/cisco-lay-off-thousands-more-second-job-cut-this-year-sources-say-2024-08-09/
[2] https://www.theregister.com/2024/02/12/cisco_sharpening_up_the_ax/
[3] https://investor.cisco.com/events/event-details/2024/Q4FY24-Earnings-Results-2024-at96a_i1QI/default.aspx
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZrqGA7e24v-rEphUv-9NsAAAANM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZrqGA7e24v-rEphUv-9NsAAAANM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZrqGA7e24v-rEphUv-9NsAAAANM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://investor.cisco.com/news/news-details/2024/CISCO-REPORTS-THIRD-QUARTER-EARNINGS/default.aspx
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZrqGA7e24v-rEphUv-9NsAAAANM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2024/03/19/cisco_closes_splunk_acquisition/
[10] https://www.theregister.com/2024/01/24/ai_networks_infiniband_vs_ethernet/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZrqGA7e24v-rEphUv-9NsAAAANM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://www.theregister.com/2024/02/08/cisco_nvidia_expand_collab/
[13] https://www.nextplatform.com/2023/07/20/ethernet-consortium-shoots-for-1-million-node-clusters-that-beat-infiniband/
[14] https://seekingalpha.com/article/4693679-cisco-systems-inc-csco-q3-2024-earnings-call-transcript
[15] https://www.theregister.com/2024/08/01/intel_to_ax_headcount/
[16] https://www.theregister.com/2024/08/05/infineon_announces_layoffs_as_q3/
[17] https://www.theregister.com/2024/08/06/dell_layoffs/
[18] https://www.theregister.com/2024/07/15/kasperky_us_operations/
[19] https://www.theregister.com/2024/08/01/intel_to_ax_headcount/
[20] https://www.theregister.com/2024/08/06/dell_layoffs/
[21] https://whitepapers.theregister.com/
Shifting business
You can now buy 400Gb ports from a number of OEMs/ODMs for about $250 a port. They are so cheap it makes more sense to buy 400Gb ports and clock them down to whatever you need than to buy anything less.
SonicOS is out there and can do just about anything needed, including the RoCE and other exotic tunings for the new AI mania.
Cisco is a 40 year old business model of charging a premium for hardware, a premium for support, and premium for anything else they can think of...they actually last had a superior product sometime late in the 20th century.
Now that ethernet ports are finally becoming commoditized and there are practical open source alternatives, sales are shrinking. The holdouts will be the shops with CIOs that are either being greased on the back end by Ciscos oh-so-ethical sales droids, or just select Cisco based on Layer 10 implementation.
(For those that don't know, the OSI model has 10 layers, not seven. Besides the practical 7, there is also:
Layer 8: Financial
Layer 9: Political
Layer 10: Religious
Cisco usually gets selected because of compliance with Layer 10 "We're a Cisco shop!" CIOs - which overcomes the Layer 8 objections despite the fact the people who actually work and tune networks know damn well there is better stuff out there)
Anonymous because of Layer 9.
Re: Shifting business
If I could upvote more than once!
For years Cisco have charged over the odds for equipment that is no longer that special. There are others that have good enough networking kit for a fraction of the cost and unless you are deeply wedded to the Cisco system it is a no-brainer to go for them instead. It is insulting these days to have to "license" ports on hardware you have already bought! A pox on them all...
Nvidia already bought Mellanox …
… and their kit is pretty damn hot and nowhere near as expensive as Cisco.
They were going to do it anyway. Now they are using the AI tag to lose it in the mass of other news releases.
Terrible, just terrible
Only $1.9 BILLION net for Q3. How can we, mere peons, stand by while they make so little money??
We simply *must* acknowledge their 4,000 person layoffs as wrote doctrine, lest the C-Suite lose their year-end bonuses and Wall Street sees a $0.01 dividend loss.
Perish the thought.
AI
The only tech where you need to know the answer, before you ask the question, to know if it answered correctly.
AI and security push?
Here's what I hear: "We've dumped a lot of money into AI and seen no profit from it, so we have to cut costs somewhere."
i.e., the usual: "We fecked up and so our employees will suffer for it."