Software giant Cisco on Wednesday said it will lay off a chunk of its workforce in 2024 as its focus shifts to artificial intelligence.
The company announced that to stay on the cutting edge, it will let 5% of the company go. According to Cisco‘s most recent annual report, the tech giant employs around 85,000 people worldwide, meaning the layoffs could affect more than 4,000 workers.
In conjunction with the layoffs, the company announced that its year-over-year revenue fell by 6% in the second quarter.
The cuts come as Cisco continues to shift toward AI. Last year, the networking hardware firm bought the machine learning cybersecurity company Splunk in a deal valued at nearly $30 billion.
“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 told investors Wednesday.
The layoffs won’t be cheap. According to Cisco, the cuts will happen through 2024 and into 2025. Cisco expects severance payments to cost the company upward of $800 million.
Wednesday’s announcement is the latest in a string of layoffs hitting tech. According to Layoffs.fyi, the industry has lost around 34,000 workers this year alone, with Microsoft, Google and Amazon leading the pack with significant cuts.