Tech company Cisco (CSCO) is planning to announce another round of layoffs, according to Reuters, where it will cut thousands of jobs as it shifts focus to areas like cybersecurity and AI. This new round of job cuts is expected to be similar in size or even bigger than the 4,000 jobs cut in February. The company didn’t comment on the layoffs, but the news led to a nearly 1% drop in its stock, which is already down almost 8% this year due to sluggish demand and supply chain issues in its core networking business.
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These layoffs reflect a broader trend in tech, where companies are cutting costs while investing heavily in AI. So far this year, over 126,000 tech workers have been laid off, with Intel recently revealing plans to let go of at least 15,000 employees in August. The announcement will likely come with Cisco’s fourth-quarter results and is part of Cisco’s effort to realign its priorities. As of July 2023, Cisco had around 84,900 employees.
Is CSCO a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CSCO stock based on six Buys, 11 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average CSCO price target of $55.07 per share implies 21.06% upside potential.
